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.
Memorial Production Partners (MEMP), through its subsidiary, is engaged in the acquisition, development, exploitation, and production of oil and natural gas properties. This stock closed up 2.8% at $22.83 in Friday's trading session.
Friday's Volume: 1.37 million
Three-Month Average Volume: 471,292
Volume % Change: 243%
From a technical perspective, MEMP jumped higher here right above some near-term support at $22.07 with strong upside volume. This stock recently gapped down from just over $24 to its recent low of $22.07. Following that move, shares of MEMP have started to bounce off that $22.07 low and its moving back into its gap-down-day zone. Market players should now look for a continuation move to the upside in the short-term if MEMP manages to clear its 50-day moving average of $22.93 with high volume.
Traders should now look for long-biased trades in MEMP as long as it's trending above Friday's intraday low of $22.32 or above that recent low of $22.07 and then once it sustains a move or close above its 50-day at $22.93 with volume that hits near or above 471, 292 shares. If that move begins soon, then MEMP will set up to re-fill its previous gap-down-day zone from this month that started just above $24. If that gap gets filled with volume, then MEMP will set up to take out its 52-week high of $24.75.