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.
Monday's Volume: 604,000
Three-Month Average Volume: 312,719
Volume % Change: 107%
From a technical perspective, LEAF ripped sharply higher here and broke out above some previous overhead resistance at $26.47 with above-average volume. This sharp jump higher on Monday is now starting to push shares of LEAF within range of triggering an even bigger breakout trade. That trade will hit if LEAF manages to take out some key previous resistance levels at $28.43 to $28.89 and then once it clears its 52-week high of $29.50 with high volume.
Traders should now look for long-biased trades in LEAF as long as it's trending above Monday's low of $25.77 or above $25 and then once it sustains a move or close above those breakout levels with volume that this near or above 312,719 shares. If that breakout starts soon, then LEAF will set up to enter new 52-week-high territory above $29.50, which is bullish technical price action. Some possible upside targets off that breakout are $35 to $40.