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.
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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.
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With that in mind, let's take a look at several stocks rising on unusual volume recently.
Natus Medical
Natus Medical (BABY) is a provider of health care products used for the screening, detection, treatment, monitoring and tracking of common medical ailments in newborn care, hearing impairment, neurological dysfunction, epilepsy, sleep disorders and balance and mobility disorders. This stock closed up 6.7% to $24.26 in Monday's trading session.
Monday's Volume: 1.03 million
Three-Month Average Volume: 320,287
Volume % Change: 173%
From a technical perspective, BABY spiked sharply higher here right above some near-term support at $22 and above its 50-day moving average of $21.22 with above-average volume. This move pushed shares of BABY into breakout and new 52-week-high territory, since this stock cleared some near-term overhead resistance levels at $23.03 to $23.38. This breakout also pushed shares of BABY above its previous sideways trading pattern, which saw the stock trend between $20.56 on the downside and $23.38 on the upside.
Traders should now look for long-biased trades in BABY as long as it's trending above Monday's low $22.62 or above $22 and then once it sustains a move or close above Monday's high of $24.66 with volume that hits near or above 320,287 shares. If we get that move soon, then BABY will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $30 to $32.
Acadia Healthcare
Acadia Healthcare (ACHC) develops and operates inpatient psychiatric facilities, residential treatment centers, group homes and substance abuse facilities in the U.S. This stock closed up 1.2% at $48.38 in Monday's trading session.
Monday's Volume: 581,000
Three-Month Average Volume: 291,456
Volume % Change: 96%
From a technical perspective, ACHC spiked modestly higher here right above some near-term support at $47 with above-average volume. This stock has been uptrending strong for the last six months, with shares moving higher from its low of $33.78 to its recent high of $49.14. During that uptrend, shares of ACHC have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of ACHC within range of triggering a near-term breakout trade. That trade will hit if ACHC manages to take out Monday's high of $48.99 to its 52-week-high at $49.14 with high volume.
Traders should now look for long-biased trades in ACHC as long as it's trending above support at $47 or above its 50-day at $45.06 and then once it sustains a move or close above those breakout levels with volume that's near or above 291,456 shares. If that breakout hits soon, then ACHC will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $55 to $60.
Align Technology
Align Technology (ALGN) designs, manufactures and markets a system of clear aligner therapy, intra-oral scanners and computer-aided design and computer-aided manufacturing digital services used in dentistry, orthodontics and dental records storage. This stock closed up 4.7% at $59.90 in Monday's trading session.
Monday's Volume: 2.10 million
Three-Month Average Volume: 1.09 million
Volume % Change: 177%
From a technical perspective, ALGN spiked sharply higher here right above its 50-day moving average of $56.03 with above-average volume. This move pushed shares of ALGN into breakout and new 52-week-high territory, after the stock took out some past overhead resistance levels at $59.80 to $60. Shares of ALGN closed just below $60 at $59.90. Market players should now look for a continuation move higher in the short-term if ALGN can manage to take out Monday's high of $61.09 with strong volume.
Traders should now look for long-biased trades in ALGN as long as it's trending above its 50-day at $56.03 and then once it sustains a move or close above Monday's intraday high of $61.09 with volume that's near or above 1.09 million shares. If we get that move soon, then ALGN will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $65 to $68.
Aratana Therapeutics
Aratana Therapeutics (PETX) is focused on the licensing, development and commercialization of prescription medicines for pets in the U.S. and Europe. This stock closed up 2.9% at $19.67 in Monday's trading session.
Monday's Volume: 220,000
Three-Month Average Volume: 91,441
Volume % Change: 178%
From a technical perspective, PETX spiked notably higher here back above its 50-day moving average of $19.34 with above-average volume. This move is quickly pushing shares of PETX within range of triggering a big breakout trade. That trade will hit if PETX manages to take out some past overhead resistance levels at $20.81 to $21.91 with high volume.
Traders should now look for long-biased trades in PETX as long as it's trending above Monday's low $19.16 or above more support at $18 and then once it sustains a move or close above those breakout levels with volume that this near or above 91,441 shares. If that breakout hits soon, then PETX will set up to re-test or possibly take out its next major overhead resistance levels at $26 to $28.
To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.
-- Written by Roberto Pedone in Delafield, Wis.
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At the time of publication, author had no positions in stocks mentioned.
Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including
CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.
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