Professional traders running mutual funds and hedge funds don't just look at a stock's price moves, they 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."
Stocks with unusual volume are something that I tweet about on a daily basis. These are also the exact type of stocks that I love to trade and alert in real time.
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.
GenMark Diagnostics (GNMK) , a molecular diagnostics company, develops, manufactures, commercializes, sells, and supports instruments and molecular tests based on its proprietary eSensor detection technology. This stock closed up 11.4% to $13 in Tuesday's trading session.
- Tuesday's Volume: 1.01 million
- Three-Month Average Volume: 288,651
- Volume % Change: 256%
From a technical perspective, GenMark Diagnostics ripped sharply higher on Tuesday right off its 50-day moving average of $11.83 a share and back above its 20-day moving average of $12.06 a share with strong upside volume flows. This high-volume rip to the upside also managed to push shares of GenMark Diagnostics into breakout territory, after the stock closed above some key near-term overhead resistance levels at $12.67 to $12.91 a share. Market players should now look for a continuation move to the upside in the short-term if this stock manages to take out Tuesday's intraday high of $13.42 a share with strong volume.
Traders should now look for long-biased trades in GenMark Diagnostics as long as it's trending above its 20-day moving average of $12.06 a share or above its 50-day moving average of $11.83 a share and then once it sustains a move or close above Tuesday's intraday high of $13.42 a share with volume that hits near or above 288,651 shares. If that move gets underway soon, then this stock will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $14.11 to $14.40, or even $16 to $17 a share.