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.
500.com (WBAI) provides online sports lottery services in the People's Republic of China. This stock closed up 1.9% to $37.05 in Wednesday's trading session.
Wednesday's Volume: 722,000
Three-Month Average Volume: 438,698
Volume % Change: 80%
From a technical perspective, WBAI jumped modestly higher here with above-average volume. This move higher on Wednesday is starting to push shares of WBAI within range of triggering a big breakout trade. That trade will hit if WBAI manages to take out Wednesday's intraday high of $37.89 to some more key overhead resistance levels at $38.50 to $38.75 with high volume.
Traders should now look for long-biased trades in WBAI as long as it's trending above Wednesday's low of $36.10 or above $35 and then once it sustains a move or close above those breakout levels with volume that hits near or above 438,698 shares. If that breakout kicks off soon, then WBAI will set up to re-test or possibly take out its next major overhead resistance levels at $41.09 to $44, or even $46.