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.
Impax Laboratories (IPXL), a specialty pharmaceutical company, develops, manufactures and markets bioequivalent pharmaceutical products. This stock closed up 7.2% at $25.65 in Monday's trading session.
Monday's Volume: 2.64 million
Three-Month Average Volume: 620,847
Volume % Change: 303%
From a technical perspective, IPXL spiked sharply higher here right above some near-term support levels at $23.50 to $23.09 and back above its 50-day moving average of $25.37 with monster upside volume. Market players should now look for a continuation move higher in the short-term if IPXL manages to take out Monday's high of $26.23 to some more near-term overhead resistance at $27.07 with high volume.
Traders should now look for long-biased trades in IPXL as long as it's trending above Monday's low of $23.98 or above $23 and then once it sustains a move or close above $26.23 to $27.07 with volume that hits near or above 620,847 shares. If that move gets underway soon, then IPXL will set up to re-test or possibly take out its 52-week high at $28.50. Any high-volume move above $28.50 will then give IPXL a chance to trend north of $30.