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.
Chubb (CB), through its subsidiaries, provides property and casualty insurance to businesses and individuals. This stock closed up 0.90% to $89.49 in Monday's trading session.
Monday's Volume: 2.83 million
Three-Month Average Volume: 1.52 million
Volume % Change: 110%
From a technical perspective, CB spiked modestly higher here right above its 200-day moving average of $88.28 with above-average volume. This move is starting to push shares of CB within range of triggering a near-term breakout trade. That trade will hit if CB manages to take out Monday's high of $89.57 to more near-term overhead resistance of $89.83 with high volume.
Traders should now look for long-biased trades in CB as long as it's trending above its 200-day at $88.28 or above its 50-day at $86.60 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.52 million shares. If that breakout hits soon, then CB will set up to re-test or possibly take out its next major overhead resistance levels $92 to $94.