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.
Versartis (VSAR), a development stage biopharmaceutical company, focuses on developing therapeutic proteins for the treatment of metabolic diseases and endocrine disorders in the U.S. This stock closed up 2.1% to $28.56 in Friday's trading session.
Friday's Volume: 1. 09 million
Three-Month Average Volume: 151,678
Volume % Change: 844%
From a technical perspective, VSAR spiked modestly higher here right above some near-term support at $25.10 with monster upside volume. This move pushed shares of VSAR right into its 50-day moving average of $29.08, before the stock closed just below that level at $28.56. Market players should now look for a continuation move to the upside in the short-term if VSAR manages to take out its 50-day moving average of $29.08 with high volume.
Traders should now look for long-biased trades in VSAR as long as it's trending above Friday's low of $27.12 or above more near-term support at $25.10 and then once it sustains a move or close above its 50-day at $29.08 with volume that hits near or above 151,678 shares. If that move starts soon, then VSAR will set up to re-test or possibly take out its next major overhead resistance levels at $31 to $32, or even $34 to its all-time high at $36.86.