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.
Proofpoint (PFPT) provides threat protection, regulatory compliance, archiving and governance, and secure communication solutions worldwide. This stock closed up 2.9% at $37.73 in Friday's trading session.
Friday's Volume: 1.12 million
Three-Month Average Volume: 565,548
Volume % Change: 95%
From a technical perspective, PFPT jumped higher here right above its 50-day moving average of $34.21 with above-average volume. This notable spike higher on Friday is starting to push shares of PFPT within range of triggering a near-term breakout trade. That trade will hit if PFPT manages to take out Friday's intraday high of $38.50 to some more key overhead resistance at $40.03 with high volume.
Traders should now look for long-biased trades in PFPT as long as it's trending above Friday's intraday low of $35.66 or above its 50-day at $34.21 and then once it sustains a move or close above those breakout levels with volume that's near or above 565,548 shares. If that breakout triggers soon, then PFPT will set up to re-test or possibly take out its next major overhead resistance levels at $43.95 to its 52-week high at $45.66.