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.
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 recently.
Riverbed Technology (RVBD) provides solutions to the fundamental problems associated with information technology performance across wide area networks in the U.S. and internationally. This stock closed up 9.4% to $19.53 in Wednesday's trading session.
Wednesday's Volume: 15.18 million
Three-Month Average Volume: 3.46 million
Volume % Change: 352%
From a technical perspective, RVBD exploded higher here right above some near-term support at $17.50 with heavy upside volume. This move pushed shares of RVBD into breakout territory, after the stock took out some near-term overhead resistance at $19.38. Market players should now look for a continuation move higher in the short-term if RVBD manages to take out Wednesday's high of $20.29 and then once it clears some key past overhead resistance at $21.39 with high volume.
Traders should now look for long-biased trades in RVBD as long as it's trending above $18.50 or above Wednesday's low of $17.79 and then once it sustains a move or close above $20.29 to $21.39 with volume that hits near or above 3.46 million shares. If we get that move soon, then RVBD will set up to re-test or possibly take out its next major overhead resistance level at $24.23.
Silver Spring Networks
Silver Spring Networks (SSNI) provides a networking platform and solutions that enable utilities to transform the power grid infrastructure into the smart grid. This stock closed up 6.5% at $22.41 in Wednesday's trading session.
Wednesday's Volume: 793,000
Three-Month Average Volume: 440,540
Volume % Change: 120%
From a technical perspective, SSNI spiked sharply higher here right above its 50-day moving average of $20.36 with above-average volume. This stock has been trending sideways for the last two months, with shares moving between $19.01 on the downside and $22.30 on the upside. Shares of SSNI are now starting to break out above the upper-end of that recent range with volume. Market players should now look for a continuation move higher in the short-term if SSNI manages to clear Wednesday's high of $22.74 to some past overhead resistance at $24 with strong volume.
Traders should now look for long-biased trades in SSNI as long as it's trending above Wednesday's low of $20.99 and then once it sustains a move or close above $22.74 to $24 with volume that's near or above 440,540 shares. If we get that move soon, then SSNI will set up to re-fill some of its previous gap-down-zone from last August that started near $32.
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.