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.
AOL (AOL) provides various digital brands, products and services to consumers, advertisers, publishers and subscribers worldwide. This stock closed up 3.7% to $43.83 in Wednesday's trading session.
Wednesday's Volume: 3.61 million
Three-Month Average Volume: 1.47 million
Volume % Change: 165%
From a technical perspective, AOL spiked higher here right above some near-term support at $41.71 with above-average volume. This move briefly pushed shares of AOL into breakout territory, after the stock flirted with some near-term overhead resistance levels at $44.34 and its 50-day moving average of $45.30. Shares of AOL hit an intraday high of $45.86 before closing below those breakout levels at $43.83. Market players should now look for a continuation move higher in the short-term if AOL manages to take out Wednesday's high of $45.86 with strong volume.
Traders should now look for long-biased trades in AOL as long as it's trending above Wednesday's low of $42.66 or above more support at $41.71 and then once it sustains a move or close above $45.86 with volume that hits near or above 1.47 million shares. If we get that move soon, then AOL will set up to re-test or possibly take out its next major overhead resistance levels at $48 to $52, or even its 52-week high at $53.28.