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.
Universal Insurance (UVE), through its subsidiaries, operates as a property and casualty insurance company performing various aspects of insurance underwriting, distribution and claims. This stock closed up 7.7% to $14.39 in Monday's trading session.
Monday's Volume: 1.88 million
Three-Month Average Volume: 610,912
Volume % Change: 266%
From a technical perspective, UVE ripped sharply higher here and broke out above some past overhead resistance levels at $13.09 to $13.97 with strong upside volume. This stock has been uptrending for the last month, with shares moving higher from its low of $9.63 to its intraday high of $14.39. During that uptrend, shares of UVE have been consistently making higher lows and higher highs, which is bullish technical price action. This spike on Monday is quickly pushing shares of UVE within range of triggering another big breakout trade. That trade will hit if UVE manages to take out Monday's high of $14.39 to its 52-week high of $14.83 with high volume.