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.
Taser International (TASR) engages in the development, manufacture and sale of conducted electrical weapons for use in law enforcement, federal, military, corrections, private security and personal defense markets worldwide. This stock closed up 5.7% at $18.08 in Tuesday's trading session.
Tuesday's Volume: 2.04 million
Three-Month Average Volume: 1.35 million
Volume % Change: 85%
From a technical perspective TASR popped sharply higher here right above its 50-day moving average of $16.76 with above-average volume. This move pushed shares of TASR into breakout territory, since the stock took out some near-term overhead resistance at $17.52. Shares of TASR are now quickly moving within range of triggering an even bigger breakout trade. That trade will hit if TASR manages to take out some key overhead resistance levels at $18.60 to its 52-week high at $18.88 with high volume.
Traders should now look for long-biased trades in TASR as long as it's trending above its 50-day at $16.76 or above $16 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.35 million shares. If that breakout triggers soon, then TASR 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.