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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DXP Enterprises (DXPE - Get Report) is engaged in distributing maintenance, repair and operating products, equipment and services to industrial customers in the U.S. This stock closed up 10.9% to $78.78 in Friday's trading session.
Friday's Volume: 422,000
Three-Month Average Volume: 222,455
Volume % Change: 95%
From a technical perspective, DXPE gapped up sharply higher here right above its 50-day moving average of $71.45 and into breakout territory above some near-term overhead resistance at $77.96 with strong upside volume flows. Market players should now look for a continuation move to the upside in the short-term if DXPE manages to take out Friday's intraday high of $79.98 with high volume.
Traders should now look for long-biased trades in DXPE as long as it's trending above $75 or above Friday's intraday low of $73.25 and then once it sustains a move or close above $79.98 with volume that hits near or above 222,455 shares. If that move begins soon, then DXPE will set up to re-fill the rest of its gap-down-day zone from May that started near $90.