4 Stocks Breaking Out on Huge Volume

 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.

Famous Dave's of America

Famous Dave's of America (DAVE) develops, owns, operates and franchises restaurants under the Famous Dave's name. This stock closed up 2.5% to $34.40 in Wednesday's trading session.

Wednesday's Volume: 554,000
Three-Month Average Volume: 68,297
Volume % Change: 771%

From a technical perspective, DAVE jumped notably higher here right above some near-term support at $32 with heavy upside volume. This uptick higher on Wednesday is starting to push shares of DAVE within range of triggering a near-term breakout trade. That trade will hit if DAVE manages to take out Wednesday's high of $34.63 to its 52-week high of $34.70 with high volume.

Traders should now look for long-biased trades in DAVE as long as it's trending above some near-term support levels at $32 or at $30.93 and then once it sustains a move or close above those breakout levels with volume that hits near or above 68,297 shares. If that breakout triggers soon, then DAVE will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $40 to $45.

Elizabeth Arden

Elizabeth Arden (RDEN), a beauty products company, engages in the manufacture, distribution, marketing and sale of fragrances, skin care and cosmetic products worldwide.  This stock closed up 14.3% to $28.63 in Wednesday's trading session.

Wednesday's Volume: 1.65 million
Three-Month Average Volume: 410,192
Volume % Change: 278%

From a technical perspective, RDEN exploded higher here right above some near-term support at $24.02 with heavy upside volume. This huge spike higher on Wednesday pushed shares of RDEN into breakout territory, since the stock closed just above some near-term overhead resistance at $28.44. This large spike is now starting to push shares of RDEN within range of triggering another big breakout trade. That trade will hit if RDEN manages to take out its 50-day moving average of $29.24 and then once it clears its gap-down-day high from May at $30.31.

Traders should now look for long-biased trades in RDEN as long as it's trending above $27 or $26.50 and then once it sustains a move or close above those breakout levels with volume that hits near or above 410,192 shares. If that breakout gets started soon, then RDEN will set up to re-fill some of its previous gap-down-day zone from May that started just above $36.

Silicon Motion Technology

Silicon Motion Technology (SIMO), a fabless semiconductor company, designs, develops and markets semiconductor solutions for mobile storage and mobile communications markets. This stock closed up 4.4% at $18.14 in Wednesday's trading session.

Wednesday's Volume: 730,000
Three-Month Average Volume: 282,572
Volume % Change: 179%

From a technical perspective, SIMO spiked sharply higher here and broke out above some near-term overhead resistance at $17.73 with above-average volume. This stock has been uptrending for the last month, with shares moving higher from its low of $15.16 to its intraday high of $18.14. During that move, shares of SIMO have been consistently making higher lows and higher highs, which is bullish technical price action. This spike higher on Wednesday is now pushing shares of SIMO within range of triggering another big breakout trade. That trade will hit if SIMO manages to take out Wednesday's intraday high of $18.18 and then once it clears its 52-week high of $18.44 with high volume.

Traders should now look for long-biased trades in SIMO as long as it's trending above Wednesday's low of $17.34 or above its 50-day moving average of $16.54 and then once it sustains a move or close above those breakout levels with volume that hits near or above 282,572 shares. If that breakout hits soon, then SIMO will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are its next major overhead resistance levels at $20.73 to $23.23.

ExamWorks Group

ExamWorks Group (EXAM), together with its subsidiaries, provides independent medical examinations, peer and bill reviews, Medicare compliance and other related services. This stock closed up 4% to $30.12 in Wednesday's trading session.

Wednesday's Volume: 1.03 million
Three-Month Average Volume: 398,912
Volume % Change: 165%

From a technical perspective, EXAM spiked sharply higher here right above its recent low of $27.79 with above-average volume. This stock has been downtrending badly for the last month and change, with shares falling from its high of $38.61 to its recent low of $27.79. During that downtrend, shares of EXAM have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of EXAM are now starting to rebound off that $27.79 low and it's quickly moving within range of triggering a big breakout trade. That trade will hit if EXAM manages to take out some near-term overhead resistance levels at $30.55 to $31.56 with high volume.

Traders should now look for long-biased trades in EXAM as long as it's trending above Wednesday's low of $28.75 and then once it sustains a move or close above those breakout levels with volume that hits near or above 398,912 shares. If that breakout begins soon, then EXAM will set up to re-test or possibly take out its next major overhead resistance level at $33. Any high-volume move above $33 will then give EXAM a chance to re-fill some of its previous gap-down-day zone from May that started at $36.

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.

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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