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.
Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."
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.
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Euronet Worldwide (EEFT - Get Report) provides payment and transaction processing and distribution solutions to financial institutions, retailers, service providers and individual consumers worldwide. This stock closed up 5% to $49.92 in Wednesday's trading session.
Wednesday's Volume: 527,000
Three-Month Average Volume: 274,075
Volume % Change: 98%
From a technical perspective, EEFT spiked sharply higher here right off its 50-day moving average of $47.68 with above-average volume. This solid move to the upside on Wednesday pushed shares of EEFT into breakout territory, since the stock took out some near-term overhead resistance at $48.98. Shares of EEFT are now quickly moving within range of triggering another big breakout trade. That trade will hit if EEFT manages to take out Wednesday's intraday high of $50 to its 52-week high at $50.32 with high volume.
Traders should now look for long-biased trades in EEFT as long as it's trending above Wednesday's intraday low of $47.40 and then once it sustains a move or close above those breakout levels volume that hits near or above 274,075 shares. If that breakout kicks off soon, then EEFT will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $55 to $60.