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.
Bon-Ton Stores (BONT), through its subsidiaries, operates department stores in the U.S. This stock closed up 8.1% to $11.79 in Monday's trading session.
Monday's Volume: 1.10 million
Three-Month Average Volume: 544,818
Volume % Change: 92%
From a technical perspective, BONT gapped sharply higher here back above its 50-day moving average of $10.75 with above-average volume. This move pushed shares of BONT into breakout territory, after the stock took out some near-term overhead resistance at $11.57. Market players should now look for a continuation move to the upside in the short-term if BONT manages to clear Monday's high of $11.94 with high volume.
Traders should now look for long-biased trades in BONT as long as it's trending above Monday's low of $11.13 or above its 50-day at $10.75 and then once it sustains a move or close above $11.94 with volume that hits near or above 544,818 shares. If that move materializes soon, then BONT will set up to re-test or possibly take out its next major overhead resistance levels at $13.50 to its 200-day moving average of $14.06.