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.
Mattress Firm (MFRM), through its subsidiaries, operates as a specialty retailer of mattresses and related products and accessories in the U.S. This stock closed up 1.6% at $44.86 in Friday's trading session.
Friday's Volume: 472,000
Three-Month Average Volume: 210,052
Volume % Change: 146%
From a technical perspective, MFRM spiked notably higher here with above-average volume. This move briefly pushed shares of MFRM back above its 50-day moving average of $46 and briefly into breakout territory above $46.63. Shares of MFRM tagged an intraday high of $47.79 before it closed the trading session at $44.86. Market players should now look for a continuation move higher in the short-term if MFRM manages to take out Friday's high of $47.79 with high volume.
Traders should now look for long-biased trades in MFRM as long as it's trending above Fridays low of $43.98 or above more near-term support at $43.20 and then once it sustains a move or close above $47.79 with volume that's near or above 210,052 shares. If that move gets underway soon, then MFRM will set up to re-test or possibly take out its next major overhead resistance levels at $49.54 to its all-time high at $49.81. Any high-volume move above $49.81 will then push shares of MFRM into new all-time-high territory, which is bullish technical price action. Some possible upside targets off that move are $55 to $60.