DELAFIELD, Wis. (Stockpickr) -- Professional traders running mutual funds a.0nd 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.
The Royal Bank of Scotland Group
The Royal Bank of Scotland Group (RBS), through its subsidiaries, provides banking and financial products and services to personal, commercial, corporate and institutional customers worldwide. This stock is trading up 7% to $10.92 in Friday's trading session.
Friday's Volume: 998,000
Three-Month Average Volume: 580,182
Volume Change: 273%
From a technical perspective, RBS is gapping up sharply higher here back above its 50-day moving average of $10.61 with strong upside volume flows. This stock recently formed a double bottom chart pattern at $10.07 to $10.02 a share. Following that bottom, shares of RBS have started to rip higher and it's now moving within range of triggering a near-term breakout trade. That trade will trigger if RBS manages to take out some key near-term overhead resistance at $11 a share with high volume.