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.
Kate Spade (KATE) , together with its subsidiaries, primarily designs and markets a range of apparel and accessories. This stock closed up 7.7% to $31.25 in Wednesday's trading session.
Wednesday's Volume: 17.23 million
Three-Month Average Volume: 2.36 million
Volume % Change: 691%
From a technical perspective, KATE ripped to the upside here right above Tuesday's intraday low of $28.30 with monster upside volume flows. Shares of KATE gapped down sharply lower on Tuesday from around $43 to $28.30 with large downside volume. This stock is now starting to rebound off that $28.30 low and off oversold conditions, since its current relative strength index reading is 31. Market players should now look for a continuation move to the upside in the short-term if KATE manages to clear Wednesday's intraday high of $31.69 with high volume.
Traders should now look for long-biased trades in KATE as long as it's trending above Wednesday's intraday low of $29.76 and then once it sustains a move or close above $31.69 with volume that hits near or above 2.36 million shares. If that move starts soon, then KATE will set up to re-test or possibly take out its next major overhead resistance level at its 200-day moving average of $34.21.
Mavenir Systems (MVNR) provides software-based telecommunications networking solutions. This stock closed up 5.6% at $11.35 in Wednesday's trading session.
Wednesday's Volume: 360,000
Three-Month Average Volume: 126,009
Volume % Change: 179%
From a technical perspective, MVNR ripped higher here right above some near-term support at $10.35 with above-average volume. This strong spike to the upside on Wednesday pushed shares of MVNR into breakout territory, since the stock took out some near-term overhead resistance at $11 with high volume. Market players should now look for a continuation move to the upside in the short-term if MVNR manages to take out Wednesday's intraday high of $11.45 with high volume.
Traders should now look for long-biased trades in MVNR as long as it's trending above Wednesday's intraday low of $10.76 or above that recent low of $10.35 and then once it sustains a move or close above $11.45 with volume that this near or above 126,009 shares. If that move begins soon, then MVNR will set up to re-test or possibly take out its next major overhead resistance levels at $12.50 to $13,25, or even its 50-day moving average of $13.51.
Volcano (VOLC) designs, develops, manufactures and commercializes a suite of precision guided therapy tools primarily to physicians, nurses and technicians worldwide. This stock closed up 2.7% at $12.51 in Wednesday's trading session.
Wednesday's Volume: 1.28 million
Three-Month Average Volume: 713,909
Volume % Change: 85%
From a technical perspective, VOLC bounced notably higher here right above some near-term support at $12 with high volume. This stock recently gapped down sharply lower from just over $16 to its recent low of $11.54 with heavy downside volume. Following that move, shares of VOLC have started to uptrend a bit and it's starting to trend within range of triggering a major breakout trade. That trade will hit if VOLC manages to take out Wednesday's intraday high of $12.57 to its gap-down-day high at $13.25 with high volume.
Traders should now look for long-biased trades in VOLC as long as it's trending above $12 or above that recent low of $11.54 and then once it sustains a move or close above those breakout levels with volume that hits near or above 713,909 shares. If that breakout materializes soon, then VOLC will set up to re-fill some of its previous gap-down-day zone that started just over $16.
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.
Follow Stockpickr on Twitter and become a fan on Facebook.
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.