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.
Generac (GNRC - Get Report) designs, manufactures and markets power generation equipment and other engine powered products for the residential, light commercial, industrial and construction markets in the U.S., Canada, and internationally. This stock closed up 4.2% at $48.94 in Monday's trading session.
Monday's Volume: 2.80 million
Three-Month Average Volume: 960,755
Volume % Change: 197%
From a technical perspective, GNRC spiked sharply higher here right above some near-term support at $45.87 with above-average volume. This stock has been downtrending badly over the last three month and change, with shares dropping sharply from its high of $62.50 to its recent low of $45.67. During that move, shares of GNRC have been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of GNRC recently formed a double bottom chart pattern $45.67 to $45.87. This stock has started to rebound off those support levels and it now looks ready to reverse its downtrend and enter a new uptrend in the short-term.
Traders should now look for long-biased trades in GNRC as long as it's trending above $48 or above Monday's low of $46.97 and then once it sustains a move or close above some near-term resistance at $49 to $49.34 with volume that hits near or above 960,755 shares. If that move gets started soon, then GNRC will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day of $51.23 or its 50-day at $52.01. Any high-volume move above those levels will then give GNRC a chance to tag $53 to $54.