Stock Quotes in this Article: KBR, MLNX, NEWP, RLOC

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.

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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.

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With that in mind, let's take a look at several stocks rising on unusual volume recently.

ReachLocal

ReachLocal (RLOC) provides a suite of online marketing and reporting solutions to small and medium-sized businesses primarily in North America, Australia, the United Kingdom, the Netherlands, Germany, Japan, Brazil and India. This stock closed up 4.2% at $13.95 in Wednesday's trading session.

Wednesday's Volume: 363,000

Three-Month Average Volume: 95,927

Volume % Change: 266%

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From a technical perspective, RLOC jumped sharply higher here right above its 200-day moving average of $13.16 with above-average volume. This move is quickly pushing shares of RLOC within range of triggering a big breakout trade. That trade will hit if RLOC manages to take out Wednesday's high of $14 to some past overhead resistance at $14.45 with high volume.

Traders should now look for long-biased trades in RLOC as long as it's trending above its 200-day at $13.16 and then once it sustains a move or close above those breakout levels with volume that's near or above 95,927 shares. If that breakout hits soon, then RLOC will set up to re-test or possibly take out its next major overhead resistance levels $15.26 to $16. Any high-volume move above those levels will then give RLOC a chance to tag its next major overhead resistance level at $17.39.

Newport

Newport (NEWP) and its subsidiaries provide technology products and systems for scientific research, microelectronics, defense/security, life and health sciences and industrial markets worldwide. This stock closed up 7.2% at $19.01 in Wednesday's trading session.

Wednesday's Volume: 544,000

Three-Month Average Volume: 153,646

Volume % Change: 273%

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From a technical perspective, NEWP ripped sharply higher here right above its 50-day moving average of $17.29 with strong upside volume. This move pushed shares of NEWP into breakout and new 52-week-high territory, since the stock took out some near-term overhead resistance at $18.49. Shares of NEWP are now quickly moving within range of triggering another major breakout trade. That trade will hit if NEWP manages to take out Wednesday's high of $19.10 to its 2012 high of $19.50 with high volume.

Traders should now look for long-biased trades in NEWP as long as it's trending above its 50-day at $17.29 and then once it sustains a move or close above those breakout levels with volume that's near or above 153,646 shares. If that breakout hits soon, then NEWP will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $23 to $25.

KBR

KBR (KBR) operates as an engineering, construction and services company worldwide. This stock closed up 5.7% at $33.62 in Wednesday's trading session.

Wednesday's Volume: 5.98 million

Three-Month Average Volume: 1.92 million

Volume % Change: 258%

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From a technical perspective, KBR spiked sharply higher here back above both its 200-day moving average of $32.13 and its 50-day moving average of $32.49 with heavy upside volume. This move is starting to push shares of KBR within range of triggering a big breakout trade. That trade will hit if KBR manages to take out some near-term overhead resistance levels at $35.27 to its 52-week high at $36.70 with high volume.

Traders should now look for long-biased trades in KBR as long as it's trending above its 200-day at $32.13 and then once it sustains a move or close above those breakout levels with volume that's near or above 1.92 million shares. If that breakout triggers soon, then KBR will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $40 to $45.

Mellanox Technologies

Mellanox Technologies (MLNX), a fabless semiconductor company, produces and supplies semiconductor interconnect products for computing, storage and communications applications in the high-performance computing, Web 2.0, storage, financial services, database, cloud and embedded markets. This stock closed up 7.6% at $43.74 in Wednesday's trading session.

Wednesday's Volume: 1.58 million

Three-Month Average Volume: 677,054

Volume % Change: 185%

From a technical perspective, MLNX ripped sharply higher here and broke out above some key overhead resistance levels at $41.19 to $42.45 with strong upside volume. This breakout pushed shares of MLNX outside of its recent sideways trading chart pattern and above a key downtrend line that started back in October. Market players should now look for a continuation move higher in the short-term if shares of MLNX can manage to take out Wednesday's high of $44.18 to its 200-day moving average of $44.45 with high volume.

Traders should now look for long-biased trades in MLNX as long as it's trending above Wednesday's low of $40.01 and then once it sustains a move or close above $44.18 to $44.45 with volume that's near or above 677,054 shares. If we get that move soon, then MLNX will set up to re-test or possibly take out its next major overhead resistance levels at $55 to $59.

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.