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.
Ohr Pharmaceutical (OHRP) , which operates as a biotechnology company, closed up 7% to $10.97 in Monday's trading session.
Monday's Volume: 234,000
Three-Month Average Volume: 56,703
Volume % Change: 269%
From a technical perspective, OHRP ripped sharply higher here with heavy upside volume. This stock has been uptrending strong for the last three months, with shares moving higher from its low of $6.53 to its intraday high of $11. During that uptrend, shares of OHRP have been consistently making higher lows and higher highs, which is bullish technical price action. Market players should now look for a continuation move higher in the short-term if OHRP manages to clear Monday's high of $11 with strong volume.
Traders should now look for long-biased trades in OHRP as long as it's trending above Monday's low of $10.32 or above $9.65 and then once it sustains a move or close above $11 with volume that's near or above 56,703 shares. If we get that move soon, then OHRP will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $13 to $14.
LHC Group (LHCG) - Get Report, together with its subsidiaries, provides post-acute continuum of care primarily for Medicare beneficiaries in the U.S. This stock closed up 3.3% to $23.71 in Monday's trading session.
Monday's Volume: 118,000
Three-Month Average Volume: 62,150
Volume % Change: 165%
From a technical perspective, LHCG spiked notably higher here right above its 200-day moving average of $22.67 and back above its 50-day moving average of $23.59 with above-average volume. This move is quickly pushing shares of LHCG within range of triggering a big breakout trade. That trade will hit if LHCG manages to take out some key near-term overhead resistance levels at $24.52 to $24.75 with high volume.
Traders should now look for long-biased trades in LHCG as long as it's trending above its 200-day at $22.67 and then once it sustains a move or close above those breakout levels with volume that hits near or above 62,150 shares. If that breakout hits soon, then LHCG will set up to re-test or possibly take out its next major overhead resistance levels at $26 to its 52-week high at $26.90. Any high-volume move above those levels will then give LHCG a chance to tag $30.
ArthroCare (ARTC) , a medical device company, engages in the development, manufacture and marketing of surgical products based on its Coblation technology in the Americas and internationally. This stock closed up 8.2% to $49.12 in Monday's trading session.
Monday's Volume: 5.50 million
Three-Month Average Volume: 178,758
Volume % Change: 2823%
From a technical perspective, ARTC gapped up sharply higher here and broke out above some near-term overhead resistance at $48.45 with monster upside volume. This move is quickly pushing shares of ARTC within range of triggering another big breakout trade. That trade will hit if ARTC manages to take out Monday's high of $49.46 to its 52-week high at $49.95 with high volume.
Traders should now look for long-biased trades in ARTC as long as it's trending above $48 or $47 and then once it sustains a move or close above those breakout levels with volume that hits near or above 178,758 shares. If that breakout hits soon, then ARTC 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.
To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.
-- Written by Roberto Pedone in Delafield, Wis.
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At the time of publication, author had no positions in stocks mentioned. Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.