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.
Raptor Pharmaceuticals (RPTP), a biopharmaceutical company, focuses on developing and commercializing life-altering therapeutics that treat debilitating and often fatal diseases. This stock closed up 6.4% to $10.92 in Wednesday's trading session.
Wednesday's Volume: 1 million
Three-Month Average Volume: 674,014
Volume % Change: 60%
From a technical perspective, RPTP ripped higher here right above some near-term support at $9.94 and above its 50-day moving average of $9.59 with above-average volume. This sharp uptick higher on Wednesday is starting to push shares of RPTP within range of triggering a major breakout trade. That trade will hit if RPTP manages to take out Wednesday's intraday high of $11.07 to more resistance at $12.20 and then above its 200-day moving average of $12.44 with high volume.
Traders should now look for long-biased trades in RPTP as long as it's trending above Wednesday's intraday low of $10.13 or above its 50-day moving average at $9.59 and then once it sustains a move or close above those breakout levels with volume that hits near or above 674,014 shares. If that breakout hits soon, then RPTP will set up to re-test or possibly take out its next major overhead resistance level at $14. Any high-volume move above $14 will then give RPTP a chance to re-fill some of its previous gap-down-day zone from March that started above $16.