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.
Clearfield (CLFD) - Get Report manufactures, markets, and sells standard and custom passive connectivity products to the fiber-to-the-premises, large enterprises, and original equipment manufacturers markets in the U.S. This stock closed up 7.5% to $21.59 in Monday's trading session.
Monday's Volume: 206,000
Three-Month Average Volume: 97,341
Volume % Change: 175%
From a technical perspective, CLFD spiked sharply higher here and broke out into new 52-week-high territory with strong upside volume flows. This stock has been uptrending strong for the last six months, with shares moving higher from its low of $10.35 to its intraday high of $22.13. During that move, shares of CLFD have been consistently making higher lows and higher highs, which is bullish technical price action.
Traders should now look for long-biased trades in CLFD as long as it's trending above $20 or above $19 and then once it sustains a move or close above Monday's high of $22.13 with volume that hits near or above 97,341 shares. If we get that move soon, then CLFD will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $24 to $25.
Sovran Self Storage
Sovran Self Storage (SSS) operates as a real estate investment trust (REIT). It engages in the acquisition, ownership, and management of self-storage properties in the U.S. This stock closed up 1.2% to $64.20 in Monday's trading session.
Monday's Volume: 529,000
Three-Month Average Volume: 177,626
Volume % Change: 203%
From a technical perspective, SSS bounced modestly higher here right above some near-term support at $62.66 with above-average volume. This stock recently put in a triple bottom chart pattern, with shares of SSS finding buying interest over the last two months at $62.42, $62.35 and $62.66. Shares of SSS are now starting to bounce higher off those support levels with volume and the stock is quickly moving within range of triggering a near-term breakout trade. That trade will hit if SSS manages to take out Monday's high of $64.47 to its 50-day moving average of $64.93 with high volume.
Traders should now look for long-biased trades in SSS as long as it's trending above those key near-term support levels at $62.66 or $62.35 and then once it sustains a move or close above those breakout levels with volume that's near or above 177,626 shares. If that breakout hits soon, then SSS will set up to re-test or possibly take out its next major overhead resistance levels at $66.61 to its 200-day moving average at $67.82. Any high-volume move above those levels will then give SSS a chance to tag $70 to $72.
Charter Communications (CHTR) - Get Report, through its subsidiaries, provides entertainment, information, and communications solutions to residential and commercial customers in the U.S. This stock closed up 4.1% to $136.92 in Monday's trading session.
Monday's Volume: 4.42 million
Three-Month Average Volume: 938,508
Volume % Change: 360%
From a technical perspective, CHTR ripped higher here right above some near-term support at $130.58 and back above its 50-day moving average of $132.44 with heavy upside volume. This move briefly pushed shares of CHTR into breakout territory, after the stock flirted with some near-term overhead resistance at $138.28. Shares of CHTR closed just below that level at $136.92. Market players should now look for a continuation move higher in the short-term if CHTR manages to take out Monday's high of $140.74 with high volume.
Traders should now look for long-biased trades in CHTR as long as it's trending above its 50-day at $132.44 or above more near-term support at $130.58 and then once it sustains a move or close above $140.74 with volume that's near or above 938,508 shares. If we get that move soon, then CHTR will set up to re-test or possibly take out its 52-week high at $144.02. Any high-volume move above that level will then give CHTR a chance to tag $150 to $155.
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.