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.
Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."
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.
51job (JOBS) provides integrated human resource services in the People's Republic of China. This stock closed up 1% at $65.96 in Monday's trading session.
Monday's Volume: 231,000
Three-Month Average Volume: 86,259
Volume % Change: 181%
From a technical perspective, JOBS jumped modestly higher here right above its 50-day moving average of $64.11 with above-average volume. This stock has been uptrending a bit for the last month, with shares moving higher from its low of $59 to its recent high of $67.94. During that uptrend, shares of JOBS have been making mostly higher lows and higher highs, which is bullish technical price action. This uptick higher on Monday is starting to push shares of JOBS within range of triggering a near-term breakout trade. That trade will hit if JOBS manages to take out Monday's intraday high of $66.10 and then once it clears more near-term overhead resistance at $67.94 with high volume.
Traders should now look for long-biased trades in JOBS as long as it's trending above its 50-day at $64.11 or above more near-term support at $62.53 and then once it sustains a move or close above those breakout levels with volume that this near or above 86,259 shares. If that breakout starts soon, then JOBS will set up to re-test or possibly take out its next major overhead resistance levels at $70.85 to its 200-day moving average of $71.98, or even $73 to $74.