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.
Gibraltar Industries (ROCK) manufactures and distributes building products. This stock closed up 3.5% at $18.87 in Monday's trading session.
Monday's Volume: 140,000
Three-Month Average Volume: 90,129
Volume % Change: 145%
From a technical perspective, ROCK spiked notably higher here back above its 50-day moving average of $18.18 with above-average volume. This stock has been trending sideways and consolidating for the last three months, with shares moving between $16.87 on the downside and $19.23 on the upside. This spike higher on Monday is now starting to push shares of ROCK within range of triggering a big breakout trade above the upper-end of its recent sideways trading chart pattern. That trade will hit if ROCK manages to take out Monday's high of $19 to its 52-week high of $19.29 with high volume.
Traders should now look for long-biased trades in ROCK as long as it's trending above Monday's low of $17.82 or above more support at $17.50 and then once it sustains a move or close above those breakout levels with volume that hits near or above 90,129 shares. If that breakout kicks off soon, then ROCK will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $24 to $25.