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.
ICICI Bank (IBN), together with its subsidiaries, provides banking and financial services to corporate and retail customers in 19 countries, including India. This stock closed up 3.6% to $44.26 in Monday's trading session.
Monday's Volume: 5.33 million
Three-Month Average Volume: 1.82 million
Volume % Change: 226%
From a technical perspective, IBN ripped sharply higher here right above some near-term support at $42.37 with heavy upside volume. This stock has been trending sideways for the last month and change, with shares moving between $41.54 on the downside and $44.95 on the upside. This spike higher on Monday is starting to push shares of IBN within range of triggering a big breakout trade above the upper-end of its recent range. That trade will hit if IBN manages to take out some near-term overhead resistance levels at $44.70 to $44.80 and then once it clears more key resistance at $44.95 with high volume.
Traders should now look for long-biased trades in IBN as long as it's trending above some key near-term support levels at $42.37 or above its 50-day at $41.62 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.82 million shares. If that breakout triggers soon, then IBN will set up to re-test or possibly take out its 52-week high at $48.44.