Editors' pick: Originally published Dec. 2.

Trading stocks that trigger major breakouts can lead to massive profits. Once a stock trends to a new high or takes out a prior overhead resistance point, it's free to find new buyers and momentum players which can ultimately push the stock significantly higher.

Breakout candidates are something that I tweet about on a daily basis. These are also the exact type of stocks I love to trade.

I frequently flag high-probability setups, breakout plays and stocks that are acting technically bullish. These are the ones that often go on to make monster moves to the upside. What's great about breakout trading is that you focus on trend, price and volume. You don't have to concern yourself with anything else. The charts do all the talking.

Trading breakouts is not a new game on Wall Street. This strategy has been mastered by legendary traders such as William O'Neal, Stan Weinstein and Nicolas Darvas. These pros know that once a stock starts to break out above past resistance levels and hold above those breakout prices, it can easily trend significantly higher.

With that in mind, here's a look at five stocks that are setting up to break out and possibly trade higher from current levels.

Golden Minerals

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One basic materials player that's starting to trend within range of triggering a big breakout trade is Golden Minerals(AUMN) - Get Report , which engages in mining, construction and exploration of mineral properties. This stock has been on fire over the last six months, with shares exploding higher by 123.4%.

If you take a look at the chart for Golden Minerals, you'll notice that this stock recently formed a double bottom chart pattern, after shares found some buying interest at 60 to 62 cents per share over the last month. Following that potential bottom, shares of Golden Minerals have now started to spike higher and move back above both the 20-day and 50-day moving averages. This spike is now beginning to push this stock within range of triggering a big breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in Golden Minerals if it manages to break out above some near-term overhead resistance levels at 75 to 79 cents per share and then above 80 cents per share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 411,029 shares. If that breakout fires off soon, then this stock will set up to retest or possibly take out its next major overhead resistance levels at 87 to 90 cents, or even $1.10 to its 52-week high of $1.16 a share.

Traders can look to buy Golden Minerals off weakness to anticipate that breakout and simply use a stop that sits right around those recent double bottom support levels. One can also buy this stock off strength once it starts to clear those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Yamana Gold

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A gold player that's starting to spike within range of triggering a big breakout trade is Yamana Gold(AUY) - Get Report , which engages in the exploration and development of precious metal properties in Brazil, Argentina, Chile, Mexico and Canada. It explores for gold, silver, and copper. This stock has been under selling pressure over the last six months, with shares dropping sharply by 27.3%.

If you take a glance at the chart for Yamana Gold, you'll notice that this stock recently formed a double bottom chart pattern after shares found some buying interest at $2.88 to $2.89 a share over the last few weeks. Following that potential bottom, this stock has now started to spike a bit higher and move within range of triggering a big breakout trade above some key overhead resistance levels. This spike is coming after a severe downtrend over the last four months that saw shares of Yamana Gold drop from $6 a share to its recent low of $2.88 a share.

Traders should now look for long-biased trade in Yamana Gold if it manages to break out above some near-term overhead resistance levels at $3.07 to its 20-day moving average of $3.17 a share and then above more resistance at around $3.38 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 19.35 million shares. If that breakout takes hold soon, then this stock will set up to retest or possibly take out its next major overhead resistance levels at its 50-day moving average of $3.58 a share to $3.80, or even $4 to its 200-day moving average of $4.26 a share.

Traders can look to buy Yamana Gold off weakness to anticipate that breakout and simply use a stop that sits right below those recent double bottom support levels. One could also buy this stock off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

AngloGold Ashanti

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Another basic materials player that's starting to trend within range of triggering a big breakout trade is AngloGold Ashanti(AU) - Get Report , which operates as a gold mining and exploration company. This stock has been hit by the sellers over the last six months, with shares falling notably by 17.7%.

If you take a glance at the chart of AngloGold Ashanti, you'll notice that this stock has been downtrending badly over the last five months, with shares falling substantially off its high of $22.91 a share to its recent low of $10.45 a share. During that downtrend, this stock has been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of AngloGold Ashanti have now started to rebound off that $10.45 low, and the stock has potentially formed a double bottom at $10.45 to $10.55 a share. This rebound is now quickly pushing this stock within range of triggering a big breakout trade above some key near-term overhead resistance levels.

Traders should now look for long-biased trades in AngloGold Ashanti if it manages to break out above some near-term overhead resistance levels at $11.60 to its 20-day moving average of $11.80 a share and then above more resistance levels at $12.02 to around $12.30 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 4.13 million shares. If that breakout develops soon, then this stock will set up to retest or possibly take out its next major overhead resistance levels at its 50-day moving average of $13.29 a share to $13.50, or even $14.37 to $14.77 a share.

Traders can look to buy AngloGold Ashanti off weakness to anticipate that breakout and simply use a stop that sits right around those recent double bottom support levels. One can also buy this stock off strength once it starts to move back above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Cerulean Pharma

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A clinical-stage biotechnology player that's starting to trend within range of triggering a big breakout trade is Cerulean Pharma (CERU) , which develops nanotechnology-based therapeutics in the areas of oncology and other treatments in the U.S. This stock has been destroyed by the sellers over the last six months, with shares collapsing by 72.5%.

If you take a glance at the chart for Cerulean Pharma, you'll notice that this stock recently formed a double bottom chart pattern, after shares found some buying interest at 63 to 64 cents per share over the last month and change. Following that potential bottom, shares of Cerulean Pharma have now started to spike a bit higher and move within range of triggering a major breakout trade above some key overhead resistance levels. This potential bottom is coming after a rough period for this stock, considering shares of Cerulean Pharma gapped down severely back in August from $3 to 95 cents per share.

Traders should now look for long-biased trades in Cerulean Pharma if it manages to break out above some near-term overhead resistance levels at 74 to 80 cents per share and then above its 50-day moving average of 83 cents to more resistance at 88 cents per share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 635,506 shares. If that breakout materializes soon, then this stock will set up to retest or possibly take out its next major overhead resistance levels at $1 to $1.20, or even its gap-down-day high from August at $1.40 a share.

Traders can look to buy Cerulean Pharma off weakness to anticipate that breakout and simply use a stop that sits right around those recent double bottom support levels. One can also buy this stock off strength once it starts to bust above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Dynavax Technologies

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My final breakout trading prospect is clinical-stage biopharmaceutical player Dynavax Technologies(DVAX) - Get Report , which discovers and develops novel vaccines and therapeutics in the U.S. This stock has been hammered lower by the bears over the last six months, with shares falling sharply by 72.8%.

If you look at the chart for Dynavax Technologies, you'll notice that this stock recently gapped down sharply lower from around $12 a share to its new 52-week low of $3.20 a share with monster downside volume flows. Following that move, this stock has now started to rebound sharply higher off that $3.20 low with a few decent upside volume days. Shares of Dynavax Technologies are spiking sharply higher on Friday right off some near-term support at $4.15 a share with decent upside volume flows. This spike is now quickly pushing this stock within range of triggering a major breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in Dynavax Technologies if it manages to break out above some near-term overhead resistance levels at $5 to $5.30 a share with volume that hits near or above its three-month average action of 2.44 million shares. If that breakout triggers soon, then this stock will set up to refill some of its previous gap-down-day zone from November that started near $12 a share. Some possible upside targets if this stock gets into that gap with strong volume are its 20-day moving average of $6.48 a share to $7 or $8 a share.

Traders can look to buy shares of Dynavax Technologies off weakness to anticipate that breakout and simply use a stop that sits just below some key near-term support at $4.15 a share. One can also buy this stock off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a conformable percentage from your entry point.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.