Stock Quotes in this Article: ARNA, INCY, LNDC, MCY

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. 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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Incyte

Incyte (INCY), which focuses on the discovery, development and commercialization of proprietary small molecule drugs to treat serious unmet medical needs, is trading up 5.2% at $19.17 in recent trading.

Today’s Volume: 1.56 million

Average Volume: 1.35 million

Volume % Change: 110%

From a technical perspective, INCY is ripping higher here right above its 50-day moving average of $17.30 with above-average volume. This move is quickly pushing INCY within range of triggering a major breakout trade. That trade will hit if INCY takes out some key overhead resistance levels at $19.60 to $19.80 and then once it clears more resistance at $20 to $20.53 with high volume.

Traders should now look for long-biased trades in INCY as long as it’s trending above some near-term support at $18.14, and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.35 million shares. If that breakout triggers soon, then INCY will set up to re-fill some its previous gap down zone from last August that started at around $26.

Arena Pharmaceuticals

Arena Pharmaceuticals (ARNA) is a clinical-stage biopharmaceutical company focused on discovering, developing and commercializing oral drugs that target G protein-coupled receptors. This stock is trading up 4.8% at $10.13 in recent trading.

Today’s Volume: 12.34 million

Average Volume: 8.61 million

Volume % Change: 135%

From a technical perspective, ARNA is spiking higher here right off some near-term support at $9.50 with monster upside volume. This stock has been uptrending strongly for the last two months, with shares moving higher from its recent low of $7.09 to its intraday high of $10.28. During that move, shares of ARAN have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed ARNA within range of triggering a major breakout trade. That trade will hit if ARNA manages to take out some key overhead resistance levels at $12.07 to $13.50 with high volume.

Traders should now look for long-biased trades in ARNA as long as it’s trending above $9.65 to $10.14, and then once it sustains a move or close above those breakout levels with volume that this near or above 8.61 million shares. If that breakout triggers soon, then ARNA will set up to enter new 52-week high territory once it clears $13.50. Some possible upside targets off that breakout are $15 to $17.

Landec

Landec (LNDC) and its subsidiaries design, develop, manufacture and sell polymer products for food and agricultural products, medical devices and licensed partner applications. This stock is trading up 6.9% at $12.82 in recent trading.

Today’s Volume: 277,000

Average Volume: 130,508

Volume % Change: 261%

From a technical perspective, LNDC is gapping higher here right above some near-term support at $11.80 with above-average volume. This move has started to push shares of LNDC into breakout territory, since the stock has moved above some near-term overhead resistance at $12.50. This move has also pushed LNDC into new 52-week-high territory, which is bullish technical price action.

Traders should now look for long-biased trades in LNDC as long as it’s trending above today’s low of $12.22 with strong upside volume flows. I would consider any upside volume day that registers near or above its three-month average action of 130,508 shares as bullish. If LNDC can maintain that trend, then this stock could possibly hit $14 to $15 in the near future.

Mercury General

Mercury General (MCY) is engaged in writing automobile insurance in a number of states, mainly California. It also writes homeowners, mechanical breakdown, fire, umbrella, and commercial automobile and property insurance. This stock is trading up 1.4% at $39.49 in recent trading.

Today’s Volume: 209,000

Average Volume: 233,761

Volume % Change: 65%

From a technical perspective, MCY is moving modestly higher here right above some near-term support at $38.33 with decent volume. This stock has been downtrending for the last month, with shares dropping from its recent high of $42.59 to its low of $38.33. During that move, shares of MCY have been consistently making lower highs and lower lows, which is bearish technical price action.

That said, MCY has started to bounce off that $38.33 low and move within range of triggering a near-term breakout trade. That trade will hit if MCY manages to take out its 200-day at $40.02 and its 50-day at $40.28 and then more resistance at $41 with high volume.

Traders should now look for long-biased trades in MCY as long as it’s trending above $38.33, and then once it sustains a move or close above those breakout levels with volume that hits near or above 233,761 shares. If that breakout hits soon, then MCY will set up to re-test or possibly take out its next major overhead resistance levels at $42.59 to $44.05.

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 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.