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.
Dick's Sporting Goods (DKS) operates as a sports and fitness retailer primarily in the Eastern U.S. This stock closed up 0.92% at $57.19 in Wednesday's trading session.
Wednesday's Volume: 4.10 million
Three-Month Average Volume: 1.59 million
Volume % Change: 189%
From a technical perspective, DKS jumped modestly higher here with above-average volume. This stock has been uptrending for the last month, with shares moving higher from its low of $50.54 to its intraday high of $57.25. During that uptrend, shares of DKS have been making mostly higher lows and higher highs, which is bullish technical price action. Market players should now look for a continuation move higher in the short-term if DKS manages to take out Wednesday's high of $57.25 with strong volume.
Traders should now look for long-biased trades in DKS as long as it's trending above $56 or $54 and then once it sustains a move or close above $57.25 with volume that hits near or above 1.59 million shares. If that move starts soon, then DKS will set up to re-test or possibly take out its 52-week high at $58.73. Any high-volume move above that level will then give DKS a chance to trend north of $60.