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.
China Cache International
China Cache International (CCIH) provides Internet content and application delivery services to businesses, government agencies and enterprises in China. This stock closed up 17.4% to $17.87 in Tuesday's trading session.
Tuesday's Volume: 1.45 million
Three-Month Average Volume: 603,356
Volume % Change: 155%
From a technical perspective, CCIH skyrocketed higher here right above some near-term support at $14.60 with heavy upside volume. This move pushed shares of CCIH into breakout and new 52-week-high territory, since this stock took out some near-term overhead resistance levels at $16.84 to $17.47. Market players should now look for a continuation move higher in the short-term if CCIH manages to take out Tuesday's high of $18.45 with strong volume.
Traders should now look for long-biased trades in CCIH as long as it's trending above Tuesday's low of $15.44 and then once it sustains a move or close above its new 52-week high at $18.45 with volume that hits near or above 603,356 shares. If we get that move soon, the CCIH will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $23 to $25.