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.
ChipMOS Technologies (IMOS), through its subsidiaries, provides semiconductor testing and assembly services and memory and logic/mixed-signal products. This stock closed up 3% at $22.55 in Wednesday's trading session.
Wednesday's Volume: 517,000
Three-Month Average Volume: 265,734
Volume % Change: 117%
From a technical perspective, IMOS spiked notably higher here right off its 50-day moving average of $22.03 with above-average volume. This stock has been uptrending a bit over the last few weeks, with shares moving higher from its low of $20.08 to its intraday high of $23.20. During that move, shares of IMOS have been consistently making higher lows and higher highs, which is bullish technical price action. Market players should now look for a continuation move to the upside in the short-term if IMOS manages to take out Wednesday's intraday high of $23.20 to its 52-week high of $24.09 with strong upside volume flows.
Traders should now look for long-biased trades in IMOS as long as it's trending above its 50-day at $22.03 or above $21 and then once it sustains a move or close above $23.20 to $24.09 with volume that hits near or above 265,734 shares. If that move gets underway soon, then IMOS will set up to enter new 52-week-high territory above $24.09, which is bullish technical price action. Some possible upside targets off that move are $25 to $30.