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.
Ocera Therapeutics (OCRX), a clinical-stage biopharmaceutical company, focuses on the development and commercialization of therapeutics for patients with acute and chronic liver disease. This stock closed up 3.4% to $16.77 in Wednesday's trading session.
Wednesday's Volume: 206,000
Three-Month Average Volume: 81,613
Volume % Change: 155%
From a technical perspective, OCRX trended higher here and broke out above some near-term overhead resistance at $16.45 with strong upside volume. This stock has been uptrending for the last month, with shares moving higher from its low of $12.01 to its intraday high of $16.97. During that move, shares of ORCX have been making mostly higher lows and higher highs, which is bullish technical price action. Market players should now look for a continuation move to the upside in the short-term if OCRX takes out Wednesday's high of $16.97 with high volume.
Traders should now look for long-biased trades in OCRX as long as it's trending above $16 or $15 and then once it sustains a move or close above $16.97 with volume that hits near or above 81,613 shares. If that move gets underway soon, then OCRX will set up to re-test or possibly take out its 52-week high at $19.94.