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
-- 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
) is a provider of software that enables fixed-line, mobile and cable service providers to deliver hosted, Unified Communications and other voice and multimedia services over their Internet protocol. This stock closed up 2% to $33.63 in Monday's trading session.
Monday's Volume: 1.24 million
Three-Month Average Volume: 359,534
Volume % Change: 300%
From a technical perspective, BSFT bounced higher here right off its 50-day moving average of $29.23 with above-average volume. This move is quickly pushing shares of BSFT within range of triggering a major breakout trade. That trade will hit if BSFT manages to take out some near-term overhead resistance at $30.83 to $31.54 with high volume.
Traders should now look for long-biased trades in BSFT as long as it's trending above its 50-day at $29.23 or above more support at $28.05 and then once it sustains a move or close above those breakout levels with volume that hits near or above 359,534 shares. If that breakout hits soon, then BFST will set up to re-test or possibly take out its next major overhead resistance levels at $38 to $39.35.
Alliance Fiber Optic Products
Alliance Fiber Optic Products
) designs, manufactures and markets a range of fiber optic components, and integrated modules incorporating these components, for communications equipment manufacturers and service providers. This stock closed up 7.4% at $34.04 in Monday's trading session.
Monday's Volume: 533,000
Three-Month Average Volume: 257,561
Volume % Change: 90%
From a technical perspective, AFOP trended up here right off some near-term support at $32 with above-average volume. This stock has recently formed a triple bottom chart pattern at $28.50, $28.83 and $28.61. Shares of AFOP are now trending above those key near-term support levels as the stock moves within range of triggering a major breakout trade. That trade will hit if AFOP manages to take out its 52-week high at $35.37 with high volume.
Traders should now look for long-biased trades in AFOP as long as it's trending above $32 or $28.61, and then once it sustains a move or close above its 52-week high at $35.37 with volume that's near or above 257,561 shares. If we get that breakout soon, then AFOP will set up to enter new 52-week high territory, which is bullish technical price action. Some possible upside targets off that move are $40 to $45.
) provides antivirus and Internet security products. This stock closed up 9.5% at $22.51 in Monday's trading session.
Monday's Volume: 1.33 million
Three-Month Average Volume: 589,072
Volume % Change: 140%
From a technical perspective, AVG surged higher here right above its 50-day moving average of $19.82 and above some more near-term support at $19.09 with above-average volume. This stock has been uptrending strong for the last three months, with shares moving higher from its low of $12.51 to its recent high of $22.91. During that move, shares of AVG have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of AVG within range of triggering a near-term breakout trade. That trade will hit if AVG manages to take out its 52-week- and all-time-high at $22.91 with high volume.
Traders should now look for long-biased trades in AVG as long as it's trending above Monday's low of $20.55 and then once it sustains a move or close above it 52-week high at $22.91 with volume that's near or above 589,072 shares. If that breakout hits soon, then AVG will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $27 to $30.
To see more stocks rising on unusual volume, check out the
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
. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.