DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Often when above-average volume moves into an equity, it precedes a large spike in volatility.
Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.
With that in mind, let's take a look at several stocks rising on unusual volume recently.
MacroGenics (MGNX - Get Report), a clinical-stage biopharmaceutical company, focuses on discovering and developing monoclonal antibody-based therapeutics for the treatment of cancer and autoimmune diseases. This stock closed up 1.2% to $19.44 in Wednesday's trading session.
Wednesday's Volume: 524,000
Three-Month Average Volume: 256,464
Volume % Change: 115%
From a technical perspective, MGNX trended modestly higher here with strong upside volume flows. This stock recently formed a double bottom chart pattern at $17.96 to $18.03. Following that bottom, shares of MGNX have now started to uptick higher and it's quickly moving within range of triggering a major breakout trade. That trade will hit if MGNX manages to take out Wednesday's intraday high of $19.83 and then once it clears more key overhead resistance levels at $20.96 to $20.99 with high volume.
Traders should now look for long-biased trades in MGNX as long as it's trending above Wednesday's low of $18.84 or above those double bottom support levels and then once it sustains a move or close above those breakout levels with volume that hits near or above 256,464 shares. If that breakout materializes soon, then MGNX will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $23.37 to $24.50.