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.
Kodiak Oil & Gas (KOG) an independent energy company, is engaged in the acquisition, exploration, exploitation, development and production of crude oil and natural gas in the Rocky Mountain region of the U.S. This stock closed up 4.7% at $14.91 in Monday's trading session.
Monday's Volume: 35.29 million
Three-Month Average Volume: 5.77 million
Volume % Change: 510%
From a technical perspective, KOG ripped sharply higher here and broke out into new 52-week-high territory with monster upside volume. This stock has been uptrending strong for the last six months, with shares moving higher from its low of $10.08 to its intraday high of $15.11. During that uptrend, shares of KOG have been making mostly higher lows and higher highs, which is bullish technical price action. Market players should now look for a continuation move to the upside in the short-term if KOG can manage to take out Monday's intraday high of $15.11 with high volume.
Traders should now look for long-biased trades in KOG as long as it's trending above Monday's intraday low of $14.65 or above more support at $14 and then once it sustains a move or close above $15.11 with volume that this near or above 5.77 million shares. If that move gets started soon, then KOG will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $17 to $20.