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.
Hyperion Therapeutics (HPTX), a commercial biopharmaceutical company, focuses on the development and commercialization of therapeutics to treat disorders in the areas of orphan diseases and hepatology. This stock closed up 2.8% to $25.96 in Wednesday's trading session.
Wednesday's Volume: 192,000
Three-Month Average Volume: 97,075
Volume % Change: 100%
From a technical perspective, HPTX spiked higher here back above both its 200-day moving average of $25.48 and its 50-day moving average of $25.80 with high volume. This uptick higher on Wednesday is starting to push shares of HPTX within range of triggering a near-term breakout trade. That trade will hit if HPTX manages to take out Wednesday's intraday high of $26.10 to some more near-term overhead resistance at $26.77 with high volume.
Traders should now look for long-biased trades in HPTX as long as it's trending above some key near-term support levels at $25 or at $24.42 and then once it sustains a move or close above those breakout levels with volume that hits near or above 97,075 shares. If that breakout hits soon, then HPTX will set up to re-test or possibly take out its next major overhead resistance levels at $30.21 to its 52-week high of $32.98.