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.
CoStar Group (CSGP) provides information, analytics, and marketing services to the commercial real estate industry in the U.S., the United Kingdom, and France. This stock closed up 4.5% to $169.51 in Friday's trading session.
Friday's Volume: 1.59 million
Three-Month Average Volume: 280,597
Volume % Change: 462%
From a technical perspective, CSGP ripped higher here right off its 50-day moving average of $164.09 with heavy upside volume. This move briefly pushed shares of CSGP into breakout territory, since this stock flirted with some near-term overhead resistance at $169.81. Shares of CSGP tagged an intraday high of $171, before closing just below that level at $169.51. Market players should now look for a continuation move higher in the short-term if CSGP manages to take out Friday's high of $171 with strong volume.
Traders should now look for long-biased trades in CSGP as long as it's trending above Friday's low of $163.48 and then once it sustains a move or close above Friday's high of $171 with volume that hits near or above 280,597 shares. If that move begins soon, the CSGP will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $174.85 to $179.80. Any high-volume move above those levels will then give CSGP a chance to re-test or possibly take out its next major overhead resistance level at $193.37.