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.
Tahoe Resources (TAHO) engages in the acquisition, exploration and development of mineral properties for the mining of precious metals in the Americas. This stock closed up 4.5% to $24.20 in Friday's trading session.
Friday's Volume: 349,000
Three-Month Average Volume: 109,097
Volume % Change: 386%
From a technical perspective, TAHO gapped up notably higher here with heavy upside volume. This move briefly pushed shares of TAHO into breakout and new 52-week-high territory, after the stock flirted with its previous 52-week high at $24.37. Shares of TAHO closed just below that level at $24.20.
Traders should now look for long-biased trades in TAHO as long as it's trending above Friday's low of $23.39 or above $22 and then once it sustains a move or close above Friday's high of $24.48 with volume that hits near or above 109,097 shares. If we get that move soon, then TAHO will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $28 to $30.
Ulta Salon, Cosmetics & Fragrance
Ulta Salon, Cosmetics & Fragrance (ULTA) operates specialty retail stores in the U.S. Its stores offer cosmetics, fragrance, haircare and skincare products, as well as related accessories and services. This stock closed up 6.4% to $95.26 in Friday's trading session.
Friday's Volume: 7.45 million
Three-Month Average Volume: 1.25 million
Volume % Change: 536%
From a technical perspective, ULTA gapped up sharply higher here and broke out above some near-term overhead resistance at $92.67 with monster upside volume. This move is quickly pushing shares of ULTA within range of triggering another major breakout trade. That trade will hit if ULTA manages to take out Friday's high of $97.86 to some past overhead resistance at $98.26 with high volume.
Traders should now look for long-biased trades in ULTA as long as it's trending above Fridays low of $95 or above $92.50 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.25 million shares. If that breakout gets underway soon, then ULTA will set up to re-fill some of its previous gap-down-day zone from last December that started at $125.
Mattress Firm (MFRM), through its subsidiaries, operates as a specialty retailer of mattresses, and related products and accessories in the U.S. This stock closed up 5.7% at $46.99 in Friday's trading session.
Friday's Volume: 889,000
Three-Month Average Volume: 251,972
Volume % Change: 258%
From a technical perspective, MFRM gapped up sharply higher here and broke out into new 52-week-high territory with strong upside volume. This stock recently pulled back right to its 50-day moving average, and then subsequently found buying interest with heavy upside volume flows. Market players should now look for a continuation move higher in the short-term if MFRM manages to take out Friday's high of $47.64 to its all-time high at $48.18 with strong volume.
Traders should now look for long-biased trades in MFRM as long as it's trending above Friday's low of $45.22 or above $44 and then once it sustains a move or close above $47.64 to $48.18 with volume that hits near or above 251,972 shares. If that move materializes soon, then MFRM will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that move are $55 to $60.
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.