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.
Post (POST) manufactures, markets and distributes ready-to-eat cereals, snacks and active nutrition products in the U.S. and Canada. This stock closed up 5.6% to $54.73 in Wednesday's trading session.
Wednesday's Volume: 1.72 million
Three-Month Average Volume: 576,016
Volume % Change: 202%
From a technical perspective, POST ripped higher here right above its recent low of $50.45 with strong upside volume. This move briefly pushed shares of POST back above its 50-day moving average of $55.52, before the stock closed just below that level at $54.73. Shares of POST are now quickly moving within range of triggering a near-term breakout trade. That trade will hit if POST manages to take out some near-term overhead resistance levels at $55.71 to Wednesday's high of $55.76 with high volume.
Traders should now look for long-biased trades in POST as long as it's trending above Wednesday's low of $51.83 and then once it sustains a move or close above those breakout levels with volume that hits near or above 576,016 shares. If that breakout materializes soon, then POST will set up to re-test or possibly take out its next major overhead resistance levels at $59.97 to its 52-week high at $60.63.