Stock Quotes in this Article: CAVM, KEYN, SGI

MADISON, 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.”

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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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Cavium

Cavium (CAVM) is a provider of semiconductor processors that enable processing for networking, communications, storage, wireless, security, video and connected home and office applications. This stock is trading up 3.3% to $32.51 in recent trading.

Today’s Volume: 2.15 million

Average Volume: 929,266

Volume % Change: 299%

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Shares of CAVM are trending higher today after the company beat Wall Street earnings-per-share estimates by 1 cent and reported revenues in-line with estimates.

From a technical perspective, CAVM is gapping higher here and flirting with its 200-day moving average at $33 with heavy upside volume. At last check, CAVM has hit an intraday high of $34.22 and volume is well above its three-month average action of 929,266 shares. This move is starting to push CAVM within range of triggering a major breakout trade. That trade will hit if CAVM manages to take out some near-term overhead resistance levels at $35.25 to its 50-day at $35.39 with high volume.

Traders should now look for long-biased trades in CAVM as long as it’s trending above its 200-day at $33 or above today’s low at $31.78 and then once it sustains a move or close above those breakout levels with volume that hits near or above 929,266 shares. If that breakout triggers soon, then CAVM will set up to re-test or possibly take out its next major overhead resistance levels at $38.99 to $39.52.

Silicon Graphics

Silicon Graphics (SGI) provides computer and storage as well as data center solutions. This stock is trading up 15.3% at $15 in recent trading.

Today’s Volume: 845,000

Average Volume: 398,402

Volume % Change: 272%

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Shares of SGI are soaring higher today after the company delivered a profit and beat Wall Street’s expectations, as well as beat the revenue expectation. Revenue jumped 16.66% to $232.6 million from the year-earlier period.

From a technical perspective, SGI is exploding higher here back above its 50-day moving average at $13.87 with above-average volume. This move is quickly pushing shares of SGI within range of triggering a major breakout trade. That trade will hit if SGI manages to take out today’s high at $15.02 and then once it clears more key overhead resistance levels at $15.88 to $15.99 with high volume.

Traders should now look for long-biased trades in SGI as long as it’s trending above its 50-day at $13.87 and then once it sustains a move or close above those breakout levels with volume that hits near or above 398,402 shares. If that breakout triggers soon, then SGI will set up to enter new 52-week high territory above $15.99, which is bullish technical price action. Some possible upside targets off that breakout are $17 to $18.

Keynote Systems

Keynote Systems (KEYN) develops and sells services, hardware and software to measure, test, assure and improve the service quality of Internet and mobile communications. This stock is trading up 4.5% to $11.72 in recent trading.

Today’s Volume: 190,000

Average Volume: 81,707

Volume % Change: 207%

From a technical perspective, KEYN is trending higher here right above its recent low of $10.85 with above-average volume. This stock had been downtrending badly for the last three months, with shares plunging lower from its high of $16.32 to its recent 52-week low of $10.85. During that move, shares of KEYN were consistently making lower highs and lower lows, which is bearish technical price action. That move pushed shares of KEYN into oversold territory, since its recent relative strength index reading was well below 30. Shares of KEYN are now bouncing off oversold levels and attempting to re-fill some of its previous gap down zone from April that started at $13.50.

Traders should now look for long-biased trades in KEYN as long as it’s trending above today’s low of $11.23 and then once it sustains a move or close above today’s high of $12.05 with volume that hits near or above 81,707 shares. If we get that move soon, then KEYN will set up to continue its trend back above its gap down day high of $11.74. If KEYN can continue to trade into that gap with volume, then this stock could re-fill the rest of the gap and tag $13 to $13.50 in the near future.

To see more stocks rising on unusual volume, check out the Stocks Rising on Unusual Volume portfolio on Stockpickr.

-- Written by Roberto Pedone in Madison, Wis.

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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Madison, 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.