4 Big-Volume Tech Stocks to Trade for Breakouts

 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.

Spansion

Spansion (CODE) designs, manufactures, develops and sells embedded systems semiconductors worldwide. This stock closed up 3.2% at $22.30 in Friday's trading session.

Friday's Volume: 2.57 million
Three-Month Average Volume: 1.48 million
Volume % Change: 106%

From a technical perspective, CODE jumped higher here with above-average volume. This stock has been uptrending over the last few weeks, with shares moving higher from its low of $18.08 to its intraday high of $22.77. During that move, shares of CODE have been consistently making higher lows and higher highs, which is bullish technical price action. That uptick higher on Friday is now pushing shares of CODE within range of triggering a near-term breakout trade. That trade will hit if CODE manages to take out Friday's intraday high of $22.77 to its 52-week high at $23.36 with high volume.

Traders should now look for long-biased trades in CODE as long as it's trending above Friday's intraday low of $21.55 or above its 50-day at $20.61 and then once it sustains a move or close above those breakout levels with volume that's near or above 1.48 million shares. If that breakout gets started soon, then CODE will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $28 to $30.

FireEye

FireEye (FEYE) provides products and services for detecting, preventing and resolving advanced cybersecurity threats. This stock closed up 6.3% at $31.14 in Friday's trading session.

Friday's Volume: 12.55 million
Three-Month Average Volume: 5.45 million
Volume % Change: 140%

From a technical perspective, FEYE jumped higher here with heavy upside volume flows. This move to the upside on Friday is starting to push shares of FEYE within range of triggering a near-term breakout trade. That trade will hit if FEYE manages to take out some near-term overhead resistance levels at $31.97 to just above $33 with high volume.

Traders should now look for long-biased trades in FEYE as long as it's trending above some near-term support levels at $30 or at $29 and then once it sustains a move or close above those breakout levels with volume that hits near or above 5.45 million shares. If that breakout hits soon, then FEYE will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $33.91 to $35.15. Any high-volume move above those levels will then give FEYE a chance to tag its next major overhead resistance levels at $37 to $37.40.

Varonis Systems

Varonis Systems (VRNS) provides software solutions for enterprises to map, analyze, manage and migrate their unstructured data. This stock closed up 6.9% to $23.80 in Friday's trading session.

Friday's Volume: 253,000
Three-Month Average Volume: 154,738
Volume % Change: 65%

From a technical perspective, VRNS jumped sharply higher here back above its 50-day moving average of $23.20 with above-average volume. This spike on Friday is quickly pushing shares of VRNS within range of triggering a big breakout trade. That trade will hit if VRNS manages to take out some key overhead resistance levels at $24.29 to $25.75 with high volume.

Traders should now look for long-biased trades in VRNS as long as it's trending above Friday's intraday low of $21.93 and then once it sustains a move or close above those breakout levels with volume that hits near or above 154,738 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 $30 to $31.50.

Take-Two Interactive Software

Take-Two Interactive Software (TTWO) develops, publishes and markets interactive entertainment for consumers worldwide. This stock closed up 4.6% at $23.51 in Friday's trading session.

Friday's Volume: 5.52 million
Three-Month Average Volume: 1.67 million
Volume % Change: 257%

From a technical perspective, TTWO exploded higher here right above its 50-day moving average of $22.26 with strong upside volume flows. This stock has been uptrending over the last month, with shares moving higher from its low of $20.40 to its intraday high of $23.66. During that move, shares of TTWO have been consistently making higher lows and higher highs, which is bullish technical price action. This spike higher on Friday is quickly pushing shares of TTWO within range of triggering a big breakout trade. That trade will hit if TTWO manages to clear its 52-week high at $23.67 with high volume.

Traders should now look for long-biased trades in TTWO as long as it's trending above its 50-day at $22.26 and then once it sustains a move or close above $23.67 with volume that's near or above 1.67 million shares. If that breakout gets underway soon, then TTWO will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $28 to $30.

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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