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.
Envision Healthcare (EVHC) provides physician-led, outsourced medical services to consumers, hospitals, health care systems, health plans and government entities in the U.S. This stock closed up 2.5% at $34.95 in Friday's trading session.
Friday's Volume: 1.98 million
Three-Month Average Volume: 849,568
Volume % Change: 173%
From a technical perspective, EVHC trended notably higher here right above some near-term support at $33.56 with above-average volume. This stock has recently formed a major bottoming chart pattern, since shares have found buying support each time it has pulled back to around $33.50 to $33. Shares of EVHC have now started to spike higher off those support levels with strong upside volume flows, and it's quickly moving within range of triggering a near-term breakout trade . That trade will hit if EVHC manages to take out its 50-day moving average of $35.12 to some more key overhead resistance levels at $35.43 to $36 with strong upside volume flows.
Traders should now look for long-biased trades in EVHC as long as it's trending above some key near-term support at $33.56 or above $33 and then once it sustains a move or close above those breakout levels with volume that's near or above 849,568 shares. If that breakout gets set off soon, then EVHC will set up to re-test or possibly take out its next major overhead resistance levels at $37.74 to its 52-week high at $38.02.