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TheStreet Open House

3 Tech Stock Rising on Big Volume

Stocks in this article: SGICAVMKEYN

MADISON, 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.

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."

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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.

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Cavium

Cavium ( CAVM) is a provider of semiconductor processors that enable processing for networking, communications, storage, wireless, security, video and connected home and office applications. This stock is trading up 3.3% to $32.51 in recent trading.

Today's Volume: 2.15 million
Average Volume: 929,266
Volume % Change: 299%

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Shares of CAVM are trending higher today after the company beat Wall Street earnings-per-share estimates by 1 cent and reported revenues in-line with estimates.

From a technical perspective, CAVM is gapping higher here and flirting with its 200-day moving average at $33 with heavy upside volume. At last check, CAVM has hit an intraday high of $34.22 and volume is well above its three-month average action of 929,266 shares. This move is starting to push CAVM within range of triggering a major breakout trade. That trade will hit if CAVM manages to take out some near-term overhead resistance levels at $35.25 to its 50-day at $35.39 with high volume.

Traders should now look for long-biased trades in CAVM as long as it's trending above its 200-day at $33 or above today's low at $31.78 and then once it sustains a move or close above those breakout levels with volume that hits near or above 929,266 shares. If that breakout triggers soon, then CAVM will set up to re-test or possibly take out its next major overhead resistance levels at $38.99 to $39.52.

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