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.
VisionChina Media (VISN), through its subsidiaries, provides advertising services in the People's Republic of China. This stock closed up 17.9% at $24.05 in Wednesday's trading session.
Wednesday's Volume: 386,000
Three-Month Average Volume: 194,282
Volume % Change: 164%
From a technical perspective, VISN gapped sharply higher here with above-average volume. This monster spike higher briefly pushed shares of VISN back above its 50-day moving average of $24.06, before the stock closed just below that level at $24.05. Shares of VISN are now starting to move within range of triggering a near-term breakout trade. That trade will hit if VISN manages to take out Wednesday's high of $24.66 to some more near-term overhead resistance at $24.88 with high volume.
Traders should now look for long-biased trades in VISN as long as it's trending above Wednesday's low of $22 or above $20 and then once it sustains a move or close above $24.66 to $24.88 with volume that's near or above 194,282 shares. If that breakout kicks off soon, then VISN will set up to re-test or possibly take out its next major overhead resistance levels at $28.65 to $28.85. Any high-volume move above those levels will then give VISN a chance to tag $30 to $32.