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.
BioMarin Pharmaceutical (BMRN) develops and commercializes biopharmaceuticals for serious diseases and medical conditions in the U.S., Europe, Latin America and internationally. This stock closed up 4.9% to $80.13 in Thursday's trading session.
Thursday's Volume: 4.02 million
Three-Month Average Volume: 1.08 million
Volume % Change: 308%
From a technical perspective, BMRN ripped sharply higher here with strong upside volume. This move is quickly pushing shares of BMRN within range of triggering a major breakout trade. That trade will hit if BMRN manages to take out Thursday's high of $80.56 to its 52-week high at $80.67 with high volume.
Traders should now look for long-biased trades in BMRN as long as it's trending above Thursday's low of $76.53 or above $74 and then once it sustains a move or close above those breakout levels with volume that's near or above 1.08 million shares. If that breakout hits soon, then BMRN will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $85 to $90.
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.