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.
Dick's Sporting Goods
Friday's Volume: 4.66 million
Three-Month Average Volume: 1.88 million
Volume % Change: 152%
From a technical perspective, DKS gapped up notably higher here right above its recent 52-week low of $42.33 with strong upside volume. This stock recently gapped down sharply from $53 to below $44 with heavy downside volume. Following that move, shares of DKS went on to print a new 52-week low of $42.33. Shares of DKS are now starting to rebound off that 52-week low and it's quickly moving within range of triggering a big breakout trade. That trade will hit if DKS manages to take out Friday's intraday high of $44.99 to its gap-down-day high of $46.17 with high volume.
Traders should now look for long-biased trades in DKS as long as it's trending above Friday's intraday low of $43.82 or above its 52-week low of $42.33 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.88 million shares. If that breakout triggers soon, the DKS will set up to re-fill some of its previous gap-down-day zone that started around $53.