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.
Atmos Energy (ATO), together with its subsidiaries, is engaged in the distribution, transmission and storage of natural gas in the U.S. This stock closed up 1.1% to $48.52 in Wednesday's trading session.
Wednesday's Volume: 1.41 million
Three-Month Average Volume: 678,395
Volume % Change: 143%
From a technical perspective, ATO spiked modestly higher here and broke out into new 52-week-high territory with above-average volume. This stock has been uptrending strong for the last two months, with shares moving higher from its low of $43.90 to its intraday high of $48.63. During that move, shares of ATO have been mostly making higher lows and higher highs, which is bullish technical price action. Market players should now look for a continuation move higher in the short-term if ATO manages to take out Wednesday's high of $48.63 with strong volume.
Traders should now look for long-biased trades in ATO as long as it's trending above Wednesday's low of $47 or above its 50-day at $46.22 and then once it sustains a move or close above $48.63 with volume that hits near or above 678,395 shares. If that move starts soon, then ATO will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that action are $53 to $55.