3 Health Care Stocks Spiking on Big Volume

MADISON, 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."

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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 today.

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Valeant Pharmaceuticals

Valeant Pharmaceuticals ( VRX) is a specialty pharmaceutical company that develops, manufactures and markets a broad range of pharmaceutical products primarily in the areas of neurology, dermatology and branded generics. This stock closed up 0.6% at $86.41on Wednesday.

Wednesday's Volume: 8.34 million
Average Volume: 1.77 million
Volume % Change: 418%

Shares of VRX jumped modestly higher on Wednesday after the company said it raised $2 billion in an offering of its common shares, which will be used to help fund its planned $8.7 billion acquisition of global eye-care company Bausch & Lomb.

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From a technical perspective, VRX bounced higher here right above some near-term support at $82 with heavy upside volume. This move is quickly pushing shares of VRX within range of triggering a near-term breakout trade. That trade will hit if VRX manages to take out some near-term overhead resistance at $88.67 with high volume.

Traders should now look for long-biased trades in VRX as long as it's trending above some key near-term support $83.86 and then once it sustains a move or close above $88.67 with volume that hits near or above 1.77 million shares. If we get that breakout soon, then VRX will set up to re-test or possibly take out its next major overhead resistance levels at $92 to $92.50. Any high-volume move above those levels will then put its next major overhead resistance level at $96.25 into range for shares of VRX.

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