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.
Puma Biotechnology (PBYI), a development stage biopharmaceutical company, focuses on the acquisition, development and commercialization of products for the treatment of various forms of cancer. This stock is trading up 2% to $174.66 in Friday's trading session.
Friday's Volume: 279,000
Three-Month Average Volume: 366,053
Volume Change: 105%
From a technical perspective, PBYI is ripping higher here right above its recent low of $168.48 with decent upside volume flows. This stock recently gapped down sharply from $212.43 to that low of $168.48 with monster downside volume. Shares of PBYI are now starting to rebound here right off that $168.48 low and it's quickly moving within range of triggering a near-term breakout trade. That trade will trigger if PBYI manages to take out its gap-down-day high of $178 a share with high volume.
Traders should now look for long-biased trades in PBYI as long as it's trending above that recent low of $168.48 and then once it sustains a move or close above $178 with volume that registers near or above 366,053 hares. If that breakout hits soon, then PBYI will set up to re-fill some of that recent gap-down-day zone that started at $212.43.