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.
Vince Holding (VNCE) - Get Report, a diversified apparel company, designs, manufactures and markets various fashion products for retailers. This stock closed up 8.1% to $25.69 in Friday's trading session.
Friday's Volume: 1.20 million
Three-Month Average Volume: 276,061
Volume % Change: 186%
From a technical perspective, VNCE exploded higher here right above some near-term support at $23.25 with strong upside volume. This move also pushed shares of VNCE back above its 50-day moving average of $25.32, which is bullish technical price action. Shares of VNCE are now starting to trend within range of triggering a major breakout trade. That trade will hit if VNCE manages to take out Friday's high of $25.70 to some more near-term overhead resistance levels at $27.50 to $27.88 with high volume.
Traders should now look for long-biased trades in VNCE as long as it's trending above Friday's low of $23.85 and then once it sustains a move or close above those breakout levels with volume that hits near or above 276,061 shares. If that breakout hits soon, then VNCE will set up to re-test or possibly take out its next major overhead resistance levels at $30.77 to its all-time high at $32.76.
Friday's Volume: 2.76 million
Three-Month Average Volume: 1.20 million
Volume % Change: 185%
From a technical perspective, DATA popped notably higher here right above some near-term support at $72.05 with above-average volume. This stock has been downtrending badly for the last month and change, with shares moving lower from its high of $102.37 to its recent low of $72.05. During that downtrend, shares of DATA have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of DATA have now started to move into oversold territory, since its current relative strength index reading is 32.03. Oversold can always get more oversold, but it's also an area where a stock can make a powerful rebound higher from.
Traders should now look for long-biased trades in DATA as long as it's trending above some near-term support at $72.05 or above its 200-day moving average of $70.13 and then once it sustains a move or close above Friday's high of $76.20 with volume that this near or above 1.20 million shares. If that move gets underway soon, then DATA will set up to re-test or possibly take out its next major overhead resistance levels at $80 to its 50-day moving average of $87.22.
Sun Communities (SUI) - Get Report, which operates as a real estate investment trust, owns, operates and develops manufactured housing communities. This stock closed up 1.5% at $44.42 in Friday's trading session.
Friday's Volume: 416,000
Three-Month Average Volume: 221,751
Volume % Change: 107%
From a technical perspective, SUI bounced modestly higher here right off its 200-day moving average of $43.78 with above-average volume. This move is starting to push shares of SUI within range of triggering a near-term breakout trade. That trade will hit if SUI manages to take out its 50-day moving average of $44.91 with high volume.
Traders should now look for long-biased trades in SUI as long as it's trending above some key near-term support at $42.89 or above $42 and then once it sustains a move or close above its 50-day at $44.91 with volume that hits near or above 221,751 shares. If that breakout hits soon, then SUI will set up to re-fill its previous gap-down-day zone from earlier this month that started at $46.54. If that gap gets filled with strong volume, then SUI will set up to challenge its next major overhead resistance levels at $48 to $51, or even $53.
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.