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.
YPF (YPF), an energy company, is engaged in the exploration, development and production of crude oil, natural gas and liquefied petroleum gas in Argentina. This stock closed up 10.3% to $31.09 in Wednesday's trading session.
Wednesday's Volume: 11.41 million
Three-Month Average Volume: 1.05 million
Volume % Change: 700%
From a technical perspective, YPF exploded higher here back above its 50-day moving average of $29.06 with monster upside volume. This move pushed shares of YPF into breakout territory, since the stock took out some near-term overhead resistance levels at $29.68 to $30.08. This spike higher on Wednesday is quickly pushing shares of YPF within range of triggering another big breakout trade. That trade will hit if YPF manages to clear Wednesday's intraday high of $31.41 to more near-term overhead resistance at $31.53 with high volume.
Traders should now look for long-biased trades in YPF as long as it's trending above its 50-day at $29.06 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.05 million shares. If that breakout starts soon, then YPF will set up to re-test or possibly take out its next major overhead resistance levels at $33.10 to its 52-week high at $34.24.