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.
Align Technology (ALGN) operates as a medical device company primarily in the U.S. and internationally. This stock closed up 2.2% at $54.81 in Friday's trading session.
Friday's Volume: 2.60 million
Three-Month Average Volume: 1.29 million
Volume % Change: 107%
From a technical perspective, ALGN spiked higher here back above its 50-day moving average of $54.34 with above-average volume. This move briefly pushed shares of ALGN into breakout territory, after the stock flirted with some near-term overhead resistance levels at $55.31 to $55.96. Shares of ALGN pulled back off its intraday high of $57.50 to close at $54.81. Market players should now look for a continuation move higher in the short-term if ALGN manages to take out Friday's high of $57.50 with strong volume.
Traders should now look for long-biased trades in ALGN as long as it's trending above $53 or $52 and then once it sustains a move or close above $57.50 with volume that this near or above 1.29 million shares. If that move starts soon, then ALGN will set up to re-test or possibly take out its next major overhead resistance levels at $59.81 to $62.
Auspex Pharmaceutical (ASPX), a biopharmaceutical company, focuses on developing and commercializing novel medicines for the treatment of orphan diseases. This stock closed up 2.5% at $29.74 in Friday's trading session.
Friday's Volume: 519,000
Three-Month Average Volume: 316,100
Volume % Change: 85%
From a technical perspective, ASPX bounced notably higher here right off some near-term support at $28 with above-average volume. This spike higher on Friday is starting to push shares of ASPX within range of triggering a near-term breakout trade. That trade will hit if ASPX manages to take out Friday's high of $30.78 to some more near-term overhead resistance at $31.87 with high volume.
Traders should now look for long-biased trades in ASPX as long as it's trending above near-term support at $28 or above more support levels at $27.24 to $26 and then once it sustains a move or close above those breakout levels with volume that's near or above 316,100 shares. If that breakout gets triggers soon, then ASPX will set up to re-test or possibly take out its next major overhead resistance levels at $34 to its all-time high at $35.78.
To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.
-- Written by Roberto Pedone in Delafield, Wis.