3 Stocks Spiking on Big Volume

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.

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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Dreamworks Animation SKG

Dreamworks Animation SKG ( DWA) is engaged in the development, production and exploitation of animated films and their associated characters in the worldwide theatrical, home entertainment, television, merchandising and licensing and other markets. This stock is trading up 8.2% at $19.13 in recent trading.

Today's Volume: 2.08 million

Average Volume: 1.09 million

Volume % Change: 221%

Shares of DWA are ripping higher today after Stifel Nicolaus upgraded the stock from sell to hold.

From a technical perspective, DWA is bouncing strongly to the upside here right off its 200-day moving average of $18.03 with heavy upside volume. This move has pushed shares of DWA into breakout territory, since the stock has cleared some near-term overhead resistance levels at $17.69 to $18.32. Shares of DWA are now quickly moving within range of triggering another major breakout trade, which will hit if DWA manages to take out some past overhead resistance at $19.82 with high volume.

Traders should now look for long-biased trades in DWA as long as it's trending above its 200-day at $18.03 or above that breakout level of $18.32 and then once it sustains a move or close above $19.82 with volume that hits near or above 1.09 million shares. If that breakout triggers soon, then DWA will set up to re-test or possibly take out its next major overhead resistance levels at $21.50 to $22.98.

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