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.
KEYW Holding (KEYW) provides mission-critical cybersecurity, cyber superiority and geospatial intelligence solutions to the U.S. Government defense, intelligence, and national security agencies, and commercial enterprises. This stock closed up 9.7% at $13.29 in Wednesday's trading session.
Wednesday's Volume: 1.37 million
Three-Month Average Volume: 517,460
Volume % Change: 164%
From a technical perspective, KEYW exploded higher here right above some near-term support levels at $12 to $11.93 with strong upside volume flows. This stock has been uptrending strong for the last month and change, with shares moving higher from its low of $9.71 to its recent high of $13.72. During that move, shares of KEYW have been making mostly higher lows and higher highs, which is bullish technical price action. This spike higher on Wednesday is now quickly pushing shares of KEYW within range of triggering a near-term breakout trade. That trade will hit if KEYW manages to take out Wednesday's intraday high of $13.33 to some more key overhead resistance levels at $13.72 to its 200-day moving average at $14.23 with high volume.
Traders should now look for long-biased trades in KEYW as long as it's trending above Wednesday's intraday low of $12.34 or above more support near $12 and then once it sustains a move or close above those breakout levels with volume that hits near or above 517,460 shares. If that breakout materializes soon, then KEYW will set up to re-test or possibly take out its next major overhead resistance levels at $15.20 to $16, or even $18.