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.
Niska Gas Storage Partners
Niska Gas Storage Partners (NKA) owns and operates natural gas storage assets in North America. This stock closed up 3.4% at $15.77 in Monday's trading session.
Monday's Volume: 250,000
Three-Month Average Volume: 155,300
Volume % Change: 50%
From a technical perspective, NKA jumped higher with above-average volume. This stock has been uptrending strong for the last two months, with shares moving higher from its low of $11.30 to its intraday high of $15.90. During that uptrend, shares of NKA have been consistently making higher lows and higher highs, which is bullish technical price action. This spike higher on Monday is starting to push shares of NKA within range of triggering a big breakout trade. That trade will hit if NKA manages to take out Monday's high of $15.90 to more resistance at $16.25 and then once it clears its 52-week high at $17 with high volume.
Traders should now look for long-biased trades in NKA as long as it's trending above $15 or above its 50-day at $13.99 and then once it sustains a move or close above those breakout levels with volume that's near or above 155,300 shares. If that breakout kicks off soon, then NKA will set up to enter new 52-week-high territory above $17, which is bullish technical price action. Some possible upside targets off that move are $20 to $23.