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.
Clovis Oncology (CLVS), a biopharmaceutical company, focuses on acquiring, developing and commercializing anti-cancer agents in the U.S., Europe and internationally. This stock closed up 4.9% at $77.50 in Wednesday's trading session.
Wednesday's Volume: 888,000
Three-Month Average Volume: 575,130
Volume % Change: 75%
From a technical perspective, CLVS bounced sharply higher here right off its 50-day moving average of $74.66 with above-average volume. This bounce is coming after CLVS briefly traded under its 50-day moving average and hit a recent low of $71.19. Shares of CLVS are now quickly moving within range of triggering a near-term breakout trade. That trade will hit if CLVS manages to take out some near-term overhead resistance at Wednesday's high of $80.74 to right around $82.50 with high volume.
Traders should now look for long-biased trades in CLVS as long as it's trending above Wednesday's low of $74.06 or above more near-term support at $71.19 and then once it sustains a move or close above those breakout levels with volume that this near or above 575,130 shares. If that breakout materializes soon, then CLVS will set up to re-test or possibly take out its next major overhead resistance levels at $87.23 to its 52-week high at $93.33.