Stock Quotes in this Article: RGR, SWHC, VHS

WINDERMERE, Fla. (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.

>>Trade 5 Hated Names to Beat the Market

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 today.

Smith & Wesson

Smith & Wesson (SWHC) is one of the manufacturers of firearms. It manufacture an array of handguns, modern sporting rifles, hunting rifles, black powder firearms, handcuffs, and firearm-related products and accessories. This stock is trading up 7.8% at $10.20 in recent trading.

 

Today's Volume: 5.04 million

Average Volume: 2.24 million

Volume % Change: 297%

Shares of SWHC are soaring today after President Barack Obama was re-elected, mirroring a similar surge in 2008 and 2009 when fears – later proven to be unfounded – of new regulation on gun ownership generated brisk sales.

From a technical perspective, SWHC is gapping higher here back above its 50-day moving average of $9.92 with monster volume. This move is quickly pushing SWHC within range of triggering a near-term breakout trade. That trade will hit once SWHC manages to take out some near-term overhead resistance at $10.47 with high volume.

Traders should now look for long-biased trades in SWHC as long as its trending above its 50-day, and then once it sustains a move or close above $10.47 with volume that hits near or above 2.24 million. If that breakout triggers soon, then SWHC will set up to re-test or possibly take out its next significant overhead resistance level at $11.24.

 

Sturm, Ruger & Company
 

Sturm, Ruger & Company (RGR) is principally engaged in the design, manufacture, and sale of firearms to domestic customers. This stock is trading up 6.1% at $47.38 in recent trading.

Today's Volume: 786,000

Average Volume: 409,451

Volume % Change: 191%

Shares of RGR are soaring today after President Barack Obama was re-elected, mirroring a similar surge in 2008 and 2009 when fears – later proven to be unfounded – of new regulation on gun ownership generated brisk sales.

From a technical perspective, RGR is gapping sharply higher here back above its 50-day moving average of $46.33 with above-average volume. This move is quickly pushing RGR within range of triggering a near-term breakout trade. That trade will hit once RGR manages to clear some near-term overhead resistance at $48.01 with high volume.

Traders should now look for long-biased trades in RGR as long as it's trending above its 50-day at $46.33, and then once it sustains a move or close above $48.01 with volume that hits near or above 409,451 shares. If that breakout triggers soon, then RGR will set up to re-test or possibly take out its next major overhead resistance levels at $50 to $51.59. Any high-volume move above $51.59 will then put it next major overhead resistance level of $57.04 into focus for RGR.
 

Vanguard Health Systems

Vanguard Health Systems (VHS) is an operator of regionally-focused integrated healthcare delivery networks with significant presence in several large and attractive markets. This stock is trading up 9.1% at $11.54 in recent trading.

Today's Volume: 1.14 million

Average Volume: 211,268

Volume % Change: 867%

Shares of hospital operators like VHS are ripping higher today after voters re-elected President Barack Obama, helping preserve the 2012 health care reform law and its expansion of health insurance coverage.

From a technical perspective, VHS is gapping up sharply higher here back above its 50-day moving average of $11.07 with monster upside volume. This move has also pushed VHS into breakout territory, since the stock has taken out some near-term overhead resistance at $11.18. Traders should now watch for the next major breakout trade to trigger for VHS. That trade will hit once VHS manages to take out some near-term overhead resistance and its 52-week high at $12.79.

Traders should now look for long-biased trades in VHS as long as it's trending above its 50-day at $11.07, and then once it sustains a move or close above $12.79 with volume that hits near or above 211,268 shares. If that breakout triggers soon, then VHS will set up to re-test or possibly take out its next major overhead resistance levels at $15 to $15.77. Keep in mind that any move above $12.79 will push VHS into new 52-week high territory, which is bullish technical price action.

To see more stocks rising on unusual volume, check out the Stocks Rising On Unusual Volume portfolio on Stockpickr.

-- Written by Roberto Pedone in Winderemere, Fla.

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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., 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.