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.
Gogo (GOGO) provides in-flight Internet connectivity and wireless in-cabin digital entertainment solutions in the U.S. and internationally. This stock closed up 6.2% at $12.67 in Monday's trading session.
Monday's Volume: 9.31 million
Three-Month Average Volume: 3.39 million
Volume % Change: 162%
From a technical perspective, GOGO spiked sharply higher here right above its recent low of $11.66 with heavy upside volume. This stock has been downtrending badly for the last six months, with shares moving lower from over $34 to its recent low or $11.66. During that move, shares of GOGO have been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of GOGO are now starting to spike higher off that $11.66 low and it's quickly moving within range of triggering near-term breakout trade. That trade will hit if GOGO manages to take out Monday's intraday high of $13.20 to some more near-term overhead resistance at $14.08 with high volume.
Traders should now look for long-biased trades in GOGO as long as it's trending above Monday's low of $12.36 or above that recent low of $11.66 and then once it sustains a move or close above those breakout levels with volume that this near or above 3.39 million shares. If that move kicks off soon, then GOGO will set up to re-test or possibly take out its gap-down-day high of $15.46. Any high-volume move above $15.46 will then give GOGO a chance to re-fill some of that gap that started just above $18.