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.
GW Pharmaceuticals (GWPH), a biopharmaceutical company, together with its subsidiaries, is engaged in discovering, developing, and commercializing cannabinoid prescription medicines. This stock closed up 6.2% at $71.99 in Friday's trading session.
Friday's Volume: 2.54 million
Three-Month Average Volume: 875,411
Volume % Change: 169%
From a technical perspective, GWPH gapped sharply higher here with above-average volume. This move briefly pushed shares of GWPH into breakout territory, since this stock flirted with some near-term overhead resistance at $72.70. Shares of GWPH tagged an intraday high of $74.90, before closing well off that level at $71.99. Market players should now look for a continuation move higher in the short-term if GWPH manages to take out Friday's intraday high of $74.90 with strong upside volume.
Traders should now look for long-biased trades in GWPH as long as it's trending above Friday's low of $70.52 and then once it sustains a move or close above Friday's intraday high of $74.90 with volume that this near or above 875,411 shares. If that move gets underway soon, then GWPH will set up to re-test or possibly take out its next major overhead resistance level at $78.08. Any high-volume move above that level will then give GWPH a chance to make a run at its all-time high of $86.45.