Stock Quotes in this Article: DIOD, MEI, RDA

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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Diodes

Diodes (DIOD) is a manufacturer and supplier of application-specific standard products within the broad discrete, logic and analog semiconductor markets, serving the consumer electronics, computing, communications, industrial and automotive markets. This stock closed up 2.2% at $25.08 on Friday.

Friday's Volume: 746,000

Average Volume: 282,829

Volume % Change: 145%

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From a technical perspective, DIOD trended notably higher here right above some near-term support at $23.50 with above-average volume. This move is quickly pushing shares of DIOD within range of triggering a near-term breakout trade. That trade will hit if DIOD manage to take out its 52-week high at $25.49 with high volume.

Traders should now look for long-biased trades in DIOD as long as it's trending above $24.50 or above $23.50, and then once it sustains a move or close above its 52-week high at $25.49 with volume that hits near or above 282,829 shares. If that breakout hits soon, then DIOD 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 $27.50 to $30. Any high-volume move above those levels will then put its three-year high at $34.67 into range for shares of DIOD.

RDA Microelectronics

RDA Microelectronics (RDA) is a China-based fabless semiconductor company that designs, develops and markets radio-frequency and mixed-signal semiconductors for a broad range of cellular, broadcast, and connectivity applications. This stock closed up 6.3% to $10.88 on Friday.

Friday's Volume: 489,000

Average Volume: 198,255

Volume % Change: 351%

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From a technical perspective, RDA ripped higher here right above its 50-day moving average at $10.15 and back above its 200-day moving average at $10.53 with above-average volume. This move is quickly pushing shares of RDA within range of triggering a near-term breakout trade. That trade will hit if RDA manages to take out some near-term overhead resistance levels at $11.35 to $11.80 with high volume.

Traders should now look for long-biased trades in RDA as long as it's trending above its 50-day at $10.15 and then once it sustains a move or close above those breakout levels with volume that hits near or above 198,255 shares. If that breakout triggers soon, then RDA will set up to re-test or possibly take out its next major overhead resistance levels at 52-week high of $12.58 to $12.77. Any high-volume move above those levels will then put $14 to $14.25 into range for shares of RDA.

Methode Electronics

Methode Electronics (MEI) is a manufacturer of component and subsystem devices with manufacturing, design and testing facilities in China, Egypt, Germany, India, Italy, Lebanon, Malta, Mexico, Philippines, Singapore, Switzerland, the UK and the U.S. This stock closed up 8.4% to $16.01 on Friday.

Friday's Volume: 1 million

Average Volume: 232,716

Volume % Change: 365%

Shares of MEI ripped higher on Friday after Robert W. Baird upgraded the stock to outperform from neutral and B. Riley also upgraded the stock to buy from neutral. This company also reported earnings and said adjusted earnings per share jumped 60% to 24 cents per share in the quarter vs. EPS of 15 cents per share in the year-earlier quarter. Revenue increased 17.33% to $148.3 million from the year-earlier quarter.

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From a technical perspective, MEI soared higher here right above its 50-day moving average of $14.65 with heavy upside volume. This stock has been uptrending strong for the last two months and change, with shares soaring higher from its low of $12.41 to its intraday high on Friday of $16.25. During that uptrend, shares of MEI have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now started to push MEI into breakout territory, since the stock flirted with some past resistance at $16.24.

Traders should now look for long-biased trades in MEI as long as it's trending above its 50-day at $14.65 or above more near-term support at $14.31, and then once it sustains a move or close above its 52-week high at $16.25 with volume that hits near or above 232,716 shares. If we get that move soon, then MEI will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $20 to $23.

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.