Stock Quotes in this Article: AFOP, FN, MATW

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.

Alliance Fiber Optic Products

Alliance Fiber Optic Products (AFOP) designs, manufactures and markets various fiber optic components and integrated modules for communications equipment manufacturers and service providers in North America, Europe and Asia. This stock closed up 12.5% to $16.68 in Wednesday's trading session.

Wednesday's Volume: 1.43 million

Three-Month Average Volume: 583,344

Volume % Change: 167%

From a technical perspective, AFOP gapped sharply higher here back above its 200-day moving average of $15.68 and above some more near-term overhead resistance at $16.20 with strong upside volume. This sharp spike higher on Wednesday is quickly pushing shares of AFOP within range of triggering another big breakout trade. That trade will hit if AFOP manages to take out Wednesday's high of $17.20 to some more near-term overhead resistance at $17.81 with high volume.

Traders should now look for long-biased trades in AFOP as long as it's trending above its 200-day at $15.68 or above $15 and then once it sustains a move or close above those breakout levels with volume that hits near or above 583,344 shares. If that breakout hits soon, then AFOP will set up to re-test or possibly take out its next major overhead resistance levels at $21.48 to $22.

Matthews International

Matthews International (MATW) operates as a designer, manufacturer and marketer of memorialization products and solutions for the cemetery and funeral home industries in the U.S., Mexico, Canada, Europe, Australia and Asia. This stock closed up 1.5% at $41.75 in Wednesday's trading session.

Wednesday's Volume: 405,000

Three-Month Average Volume: 138,524

Volume % Change: 183%

From a technical perspective, MATW trended modestly higher here right off its 50-day moving average of $40.95 with above-average volume. This stock recently formed a double bottom chart pattern at $39.85 to $39.75. Following that bottom, shares of MATW have started to uptrend and push back above its 50-day moving average. This spike higher on Wednesday is now pushing the stock within range of triggering a near-term breakout trade. That trade will hit if MATW manages to take out Wednesday's high of $41.76 to some more near-term overhead resistance at $42.48 with high volume.

Traders should now look for long-biased trades in MATW as long as it's trending above Wednesday's low of $40.89 or above its 200-day at $39.94 and then once it sustains a move or close above those breakout levels with volume that this near or above 138,524 shares. If that breakout materializes soon, then MATW will set up to re-test or possibly take out its next major overhead resistance level at its 52-week high of $44.33.

Fabrinet

Fabrinet (FN) provides optical packaging and precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers of optical communication components, modules and sub-systems, and industrial lasers and sensors. This stock closed up 3% at $21.12 in Wednesday's trading session.

Wednesday's Volume: 532,000

Three-Month Average Volume: 227,480

Volume % Change: 191%

From a technical perspective, FN jumped notably higher here and broke out into new 52-week-high territory above some near-term overhead resistance at $21 with above-average volume. This stock has been uptrending strong for the last two months, with shares moving higher from its low of $16.56 to its intraday high of $21.20. During that move, shares of FN have been consistently making higher lows and higher highs, which is bullish technical price action. Market players should now look for a continuation move higher in the short-term if FN manages to take out its new 52-week high of $21.20 with strong volume.

Traders should now look for long-biased trades in FN as long as it's trending above some key near-term support levels at $19.62 or at its 50-day moving average of $19.15 and then once it sustains a move or close above $21.20 with volume that hits near or above 227,480 shares. If that move starts soon, then FN will set up to re-test or possibly take out its next major overhead resistance levels at $25 to $26.

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.