3 Stocks Rising on Big 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.

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 recently.

Tower Semiconductor

Tower Semiconductor (TSEM), an independent semiconductor foundry, manufactures analog intensive mixed-signal semiconductor devices in the U.S., Asia and Europe. This stock closed up 7.2% to $11.06 in Monday's trading session.

Monday's Volume: 1.94 million
Three-Month Average Volume: 399,675
Volume % Change: 317%

From a technical perspective, TSEM ripped sharply higher here right above some near-term support at $10.01 with strong upside volume flows. This sharp move to the upside on Monday is quickly pushing shares of TSEM within range of triggering a big breakout trade. That trade will hit if TSEM manages to take out Monday's intraday high of $11.19 to its 52-week high of $11.78 with high volume.

Traders should now look for long-biased trades in TSEM as long as it's trending above Monday's intraday low of $10.17 or above its 50-day moving average at $9.77 and then once it sustains a move or close above those breakout levels with volume that hits near or above 399,675 shares. If that breakout hits soon, then TSEM will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $13 to $14, or even $15.

Varonis Systems

Varonis Systems (VRNS) provides software solutions for enterprises to map, analyze, manage and migrate their unstructured data. This stock closed up 7.1% to $22.65 in Monday's trading session.

Monday's Volume: 282,000
Three-Month Average Volume: 144,706
Volume % Change: 80%

From a technical perspective, VRNS ripped sharply higher here right above some near-term support at $20.34 with above-average volume. This sharp spike to the upside on Monday is quickly pushing shares of VRNS within range of triggering a near-term breakout trade. That trade will hit if VRNS manages to take out some near-term overhead resistance levels at $22.74 to $23.21 and then once it clears its 50-day moving average of $24.10 with high volume.

Traders should now look for long-biased trades in VRNS as long as it's trending above Monday's intraday low of $21.25 or above more near-term support at $20.34 and then once it sustains a move or close above those breakout levels with volume that hits near or above 144,706 shares. If that breakout triggers soon, then VRNS will set up to re-test or possibly take out its next major overhead resistance levels at $27.50 to $30, or even $31.50.

Faro Technologies

Faro Technologies (FARO), together with its subsidiaries, designs, develops, manufactures, markets and supports software-based three-dimensional measurement and imaging systems for manufacturing, industrial, building construction and forensic applications. This stock closed up 3% at $50.79 in Monday's trading session.

Monday's Volume: 223,000
Three-Month Average Volume: 123,216
Volume % Change: 82%

From a technical perspective, FARO jumped notably higher here back above its 50-day moving average of $46.50 with above-average volume. This trend to the upside on Monday is quickly pushing shares of FARO within range of triggering a big breakout trade. That trade will hit if FARO manages to take out Monday's intraday high of $50.93 and then once it clears more near-term overhead resistance at $53 with high volume.

Traders should now look for long-biased trades in FARO as long as it's trending above Monday's intraday low of $48.38 and then once it sustains a move or close above those breakout levels with volume that hits near or above 123,216 shares. If that breakout gets underway soon, then FARO will set up to re-test or possibly take out its next major overhead resistance levels at $55 to $58, or even $60 to its 52-week high of $60.91.

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.

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