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.
Control4 (CTRL) provides automation and control solutions for the connected home. This stock closed up 6.5% to $19.26 in Monday's trading session.
Monday's Volume: 930,000
Three-Month Average Volume: 313,839
Volume % Change: 202%
From a technical perspective, CTRL ripped sharply higher here back above its 200-day moving average of $18.90 with strong upside volume. This spike higher on Monday is quickly pushing shares of CTRL within range of triggering a near-term breakout trade. That trade will hit if CTRL manages to take out some key near-term overhead resistance levels at $19.35 to $20.04 with high volume.
Traders should now look for long-biased trades in CTRL as long as it's trending above Monday's intraday low of $18.18 or above its 50-day at $17.62 and then once it sustains a move or close above those breakout levels with volume that hits near or above 313,839 shares. If that breakout triggers soon, then CTRL will set up to re-test or possibly take out its next major overhead resistance levels at $21 to $22, or even $23 to $24.