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.
CoStar Group (CSGP) provides information, analytics and marketing services to the commercial real estate industry in the U.S., the U.K. and France. This stock closed up 0.76% to $183 in Thursday's trading session.
Thursday's Volume: 637,000
Three-Month Average Volume: 125,077
Volume % Change: 387%
From a technical perspective, CSGP spiked modestly higher here right above some near-term support at $172.50 with strong upside volume. This move is quickly pushing shares of CSGP within range of triggering a big breakout trade. That trade will hit if CSGP manages to take out some key overhead resistance levels at $185.77 to $185.96 and then once it clears more resistance at $187.72 to its 52-week high at $188.43 with high volume.
Traders should now look for long-biased trades in CSGP as long as it's trending above its 50-day at $178.10 and then once it sustains a move or close above those breakout levels with volume that this near or above 125,077 shares. If that breakout hits soon, then CSGP will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $195 to $200.
To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.
-- Written by Roberto Pedone in Delafield, Wis.