Stock Quotes in this Article: DMD, MLNX, SWI

WINDERMERE, Fla. (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. Many times when above average volume moves into 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.

Mellanox Technologies

Mellanox Technologies (MLNX) is a fabless semiconductor company that produces and supplies interconnect products that facilitate data transmission between servers, storage systems and communications infrastructure equipment and other embedded systems. This stock is trading up 2.3% at $117.03 in recent trading.

Today’s Volume: 1.3 million

Average Volume: 999,609

Volume % Change: 107%

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From a technical perspective, MLNX is trending higher today with above average volume. This move has pushed MLNX into all-time high territory, since the stock printed $119.10 in intraday trading. Since hitting that high, shares of MLNX have pulled back to its current price of around $117.

Traders should now look for long-biased trades in MLNX as long as it’s trending above $115.45 to $119.10 with high volume. Look for a sustained move or close above those levels with volume that’s near or above 999,609 shares. If MLNX can hold that trend, then this stock has a great chance of heading north of $120 in the near future.

SolarWinds

SolarWinds (SWI) designs, develops, markets, sells and supports enterprise information technology, infrastructure management software to IT professionals in organizations of all sizes. This stock is trading up 5.9% at $58.15 in recent trading.

Today’s Volume: 1.3 million

Average Volume: 1.1 million

Volume % Change: 111%

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From a technical perspective, SWI is bouncing hard here right around some near-term support at $54 with above average volume. This powerful move to the upside has now pushed SWI into breakout territory and 52-week high territory, since the stock has pushed above some near-term overhead resistance at $56.94.

Traders should now look for long-biased trades in SWI as long as it’s trending above $54.78 to $56.94 with strong upside volume flows. I would consider any upside volume day that registers near or above 1.1 million shares as bullish. If SWI can maintain this trend, then this stock should head north of $50 in the near future.

Demand Media

Demand Media (DMD) is focused on an Internet-based model for the professional creation of content at scale. This stock is trading up 5.1% at $10.67 in recent trading.

Today’s Volume: 493,000

Average Volume: 463,514

Volume % Change: 79%

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From a technical perspective, DMD is gapping higher here right around some near-term support at $10 with above average volume. This move has also pushed DMD into breakout territory, since the stock has started to move above some near-term overhead resistance at $10.35.

Traders should now look for long-biased trades in DMD as long as its trending above $10.35, and then once it sustains a move or close above its 50-day at $10.93 with high volume. Look for volume on that move that hits near or above 463,514 shares. If DMD triggers that move above its 50-day with volume, then this stock has a great chance of re-testing or taking out its next major overhead resistance levels at $11.50 to $12.50.

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

-- Written by Roberto Pedone in Winderemere, Fla.


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

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.