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.
Cardtronics (CATM) provides automated consumer financial services through its network of automated teller machines and multi-function financial services kiosks. This stock closed up 4.5% at $31.71 in Wednesday's trading session.
Wednesday's Volume: 979,000
Three-Month Average Volume: 488,886
Volume % Change: 129%
From a technical perspective, CATM ripped higher here with above-average volume. This stock has been downtrending badly for the last three months, with shares moving lower from its high of $43.48 to its recent low of $28.03. During that downtrend, shares of CATM have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of CATM have now started to rebound higher off that $28.03 low and it's now quickly moving within range of triggering a near-term breakout trade. That trade will hit if CATM manages to take out some near-term overhead resistance levels at $32.27 to its 50-day moving average of $33.33 with high volume.
Traders should now look for long-biased trades in CATM as long as it's trending above Wednesday's low of $30.37 or above $29 and then once it sustains a move or close above those breakout levels with volume that's near or above 488,886 shares. If that breakout starts soon, then CATM will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $38.26 to $38.50.