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.
Intercontinental Exchange (ICE) operates a network of regulated exchanges and clearing houses for financial and commodity markets in the U.S., the U.K., Continental Europe and Canada. This stock closed up 1.6% to $194.36 in Friday's trading session.
Friday's Volume: 1.70 million
Three-Month Average Volume: 924,794
Volume % Change: 223%
From a technical perspective, ICE jumped notably higher here right off its 50-day moving average of $190.71 with above-average volume. This stock has been uptrending a bit for the last few weeks, with shares moving higher from its low of $182.40 to its intraday high of $196.74. During that move, shares of ICE have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of ICE back above its 50-day moving average, which is bullish technical price action. Market players should now look for a continuation move to the upside in the near-term if ICE manages to take out Friday's intraday high of $196.74 with strong volume.
Traders should now look for long-biased trades in ICE as long as it's trending above its intraday low of $191.10 or above its 50-day at $190.71 and then once it sustains a move or close above Friday’s intraday high of $196.74 with volume that hits near or above 924,794 shares. If that move gets underway soon, then ICE will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $201.79 to $203. Any high-volume move above $203 will then give ICE a chance to tag $206 to $210.