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.
AtriCure (ATRC), a medical device company, provides atrial fibrillation solutions worldwide. This stock is trading up 2.1% to $22.74 in Monday's trading session.
Monday's Volume: 187,000
Three-Month Average Volume: 171,793
Volume % Change: 155%
From a technical perspective, ATRC is spiking notably higher here with above-average volume. This stock has been uptrending over the last week or so, with shares moving higher from its low of $19.90 to its recent high of $22.98. During that uptrend, shares of ATRC have been consistently making higher lows and higher highs, which is bullish technical price action. This jump higher on Monday is now starting to push shares of ATRC within range of triggering a big breakout trade. That trade will trigger if ATRC manages to take out its 52-week high of $22.98 to some past resistance at $23 with high volume.
Traders should now look for long-biased trades in ATRC as long as it's trending above some near-term support at $21.50 or at $21 and then once it sustains a move or close above those breakout levels with volume that hits near or above 171,793 shares. If that breakout hits soon, then ATRC will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $28 to $30.