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.
Media General (MEG) owns and operates broadcast television stations and related Web sites and mobile news applications in the U.S. This stock closed up 5.5% to $18.36 in Wednesday's trading session.
Wednesday's Volume: 1.02 million
Three-Month Average Volume: 371,013
Volume % Change: 201%
From a technical perspective, MEG gapped up sharply higher here and broke out above some near-term overhead resistance levels at $17.50 to $17.54 with high volume. This move is now pushing shares of MEG within range of triggering another big breakout trade. That trade will hit if MEG manages to take out Wednesday's intraday high of $18.51 and then once it clears more key overhead resistance levels at $18.92 to $19.69 with high volume.
Traders should now look for long-biased trades in MEG as long as it's trending above Wednesday's low of $17.86 and then once it sustains a move or close above those breakout levels with volume that hits near or above 371,013 shares. If that breakout hits soon, then MEG will set up to re-test or possibly take out its next major overhead resistance levels at $23 to its 52-week high at $23.97.