Stock Quotes in this Article: NNI, PSIX, SFM

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.

Sprouts Farmers Market (SFM), through its subsidiaries, engages in the retailing of natural and organic food in the U.S. This stock closed up 4% at $38.97 in Friday's trading session.

Friday's Volume: 3.16 million

Three-Month Average Volume: 818,377

Volume % Change: 326%

From a technical perspective, SFM jumped sharply higher here right above its 50-day moving average of $38.61 with above-average volume. This move is quickly pushing shares of SFM within range of triggering a big breakout trade. That trade will hit if SFM manages to take out Friday's high of $39.98 to some more key overhead resistance at $40.09 with high volume.

Traders should now look for long-biased trades in SFM as long as it's trending above Friday's low of $37.39 or above its 50-day at $36.81 and then once it sustains a move or close above those breakout levels with volume that's near or above 818,377 shares. If that breakout hits soon, then SFM will set up to re-test or possibly take out its next major overhead resistance levels at $44 to $45, or even $48.

Power Solutions International (PSIX) designs, manufactures, distributes and supports power systems for original equipment manufacturers of off-highway industrial equipment in North America, Asia, and Europe. This stock closed up 5.1% at $74.10 in Friday's trading session.

Friday's Volume: 102,000

Three-Month Average Volume: 54,784

Volume % Change: 85%

From a technical perspective, PSIX spiked sharply higher here right off its 50-day moving average of $70.67 with above-average volume. This move is quickly pushing shares of PSIX within range of triggering a major breakout trade. That trade will hit if PSIX manages to take out some near-term overhead resistance levels at $76.93 to $78.44 and then once it clears its all-time high at $78.96 with high volume.

Traders should now look for long-biased trades in PSIX as long as it's trending above its 50-day at $70.67 and then once it sustains a move or close above those breakout levels with volume that this near or above 54,784 shares. If that breakout hits soon, then PSIX will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $85 to $95.

Nelnet (NNI), an education services company, provides processing services and education-related products and services in the areas of asset management and finance, loan servicing, payment processing and enrollment services in the U.S. This stock closed up 10% at $40.12 in Friday's trading session.

Friday's Volume: 413,000

Three-Month Average Volume: 90,698

Volume % Change: 426%

From a technical perspective, NNI gapped up sharply higher here back above both its 50-day moving average of $38.50 and its 200-day moving average of $39.28 with heavy upside volume. This move is quickly pushing shares of NNI within range of triggering a near-term breakout trade. That trade will hit if NNI manages to take out Friday's high of $41.95 to some more near-term overhead resistance at $42.14 with high volume.

Traders should now look for long-biased trades in NNI as long as it's trending above its 50-day at $38.50 and then once it sustains a move or close above those breakout levels with volume that hits near or above 90,698 shares. If that breakout materializes soon, then NNI will set up to re-test or possibly take out its next major overhead resistance level at its 52-week high of $45.49.

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.