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.
Ardmore Shipping (ASC) - Get Report is engaged in the seaborne transportation of petroleum products and chemicals for oil majors, oil companies, oil and chemical traders, and chemical companies worldwide. This stock closed up 8.9% at $13.65 in Wednesday's trading session.
Wednesday's Volume: 544,000
Three-Month Average Volume: 71,777
Volume % Change: 675%
From a technical perspective, ASC ripped sharply higher here right off some near-term support at $12.46 with monster upside volume. This stock had been downtrending badly for the last two months, with shares dropping from its high of $15.73 to its low of $12.46. During that move, shares of ASC have been consistently making lower highs and lower lows, which is bearish technical price action. That said, this sharp spike higher on Wednesday now looks ready to push ASC out of its recent downtrend and into a new uptrend.
Traders should now look for long-biased trades in ASC as long as it's trending above $13 and then once it sustains a move or close Wednesday's high of $13.80 to its 50-day moving average at $14.17 with volume that's near or above 71,777 shares. If we get that move soon, then ASC will set up to re-test or possibly take out its next major overhead resistance levels at $14.81 to $15, or even its 52-week high at 15.84.
United Insurance (UIHC) - Get Report operates as a property and casualty insurance holding company that sources, writes and services residential property and casualty insurance policies in Florida, Massachusetts, New Jersey, North Carolina, Rhode Island, South Carolina and Texas. This stock closed up 6.8% to $15.05 in Wednesday's trading session.
Wednesday's Volume: 761,000
Three-Month Average Volume: 134,280
Volume % Change: 479%
From a technical perspective, UIHC jumped sharply higher here and broke out above some near-term overhead resistance at $15 with heavy upside volume. This move pushed shares of UIHC into new 52-week-high territory, which is bullish technical price action. Market players should now look for a continuation move higher in the short-term if UIHC manages to take out Wednesday's high of $15.20 with strong volume.
Traders should now look for long-biased trades in UIHC as long as it's trending above Wednesday's low of $14.16 or above its 50-day at $13.36 and then once it sustains a move or close above $15.20 with volume that hits near or above 134,280 shares. If we get that move soon, then UIHC will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $18 to $20.
SohuFun (SFUN) - Get Report operates a real estate Internet portal and a home furnishing and improvement Web site in the People's Republic of China. This stock closed up 11.6% at $93.77 in Wednesday's trading session.
Wednesday's Volume: 4.02 million
Three-Month Average Volume: 1.61 million
Volume % Change: 196%
From a technical perspective, SFUN exploded higher here right above its 50-day moving average of $82.32 with strong upside volume. This move blasted shares of SFUN higher and pushed the stock into breakout territory, since shares took out some near-term overhead resistance levels at $83.77 to $84.10. Shares of SFUN also flirted with its all-time high of $95.39, but the stock closed below that level at $93.77. Traders should now look for a continuation move higher in the short-term if SFUN manage to clear Wednesday's high of $96.23 with strong volume.
Traders should now look for long-biased trades in SFUN as long as it's trending above $90 and then once it sustains a move or close above $96.23 with volume that hits near or above 1.61 million shares. If we get that move soon, then SFUN will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $100 to $110.
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.