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.
Envestnet (ENV), together with its subsidiaries, provides wealth management software and services to financial advisors and institutions in the U.S. and internationally. This stock closed up 1.6% at $43.14 in Wednesday's trading session.
Wednesday's Volume: 569,000
Three-Month Average Volume: 275,512
Volume % Change: 100%
From a technical perspective, ENV trended up modestly higher here right off its 50-day moving average of $42.38 with above-average volume. This move is quickly pushing shares of ENV within range of triggering a near-term breakout trade. That trade will hit if ENV manages to take out Wednesday's high of $43.18 to some more near-term overhead resistance levels at $43.72 to $44 with high volume.
Traders should now look for long-biased trades in ENV as long as it's trending above $42 or $41 and then once it sustains a move or close above those breakout levels with volume that hits near or above 275,512 shares. If that breakout materializes soon, then ENV will set up to re-test or possibly take out its 52-week high at $48.54.