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.
Infoblox (BLOX) develops, markets and sells automated network control solutions worldwide. This stock closed up 5.6% to $18.16 in Wednesday's trading session.
Wednesday's Volume: 8.33 million
Three-Month Average Volume: 1.58 million
Volume % Change: 708%
From a technical perspective, BLOX ripped higher here right above its recent low of $17.10 with monster upside volume. This stock recently gapped down sharply from over $32 to $17.10 with monster downside volume. That move has pushed shares of BLOX into oversold territory, since its current relative strength index reading is 20.38. Oversold can always get more oversold, but it's also an area where a stock can bounce sharply higher from.
Traders should now look for long-biased trades in BLOX as long as it's trending above its recent low of $17.10 and then once it sustains a move or close above Wednesday's high of $18.38 to its gap-down-day high of $18.94 with volume that hits near or above 1.58 million shares. If we get that move soon, then BLOX will set up to re-fill some of its previous gap-down-day zone that started at $32. Look for a quick move towards $24 to $25.