DELAFIELD, Wis. (Stockpickr) -- 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, then it's free to find new buyers and momentum players who can ultimately push the stock significantly higher.

Breakout candidates are something that I tweet about on a daily basis. I frequently tweet out high-probability setups, breakout plays and stocks that are acting technically bullish. These are the stocks 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, then 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.

Karyopharm Therapeutics

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One clinical-stage pharmaceutical player that's starting to trend within range of triggering a big breakout trade is Karyopharm Therapeutics (KPTI) - Get Karyopharm Therapeutics, Inc. Report, which focuses on the discovery and development of drugs directed against nuclear transport targets for the treatment of cancer and other major diseases. This stock has been smacked lower by the sellers over the last three months, with shares falling sharply by 48.5%.

If you take a look at the chart for Karyopharm Therapeutics you'll notice that this stock recently gapped down sharply lower from over $22 to $12.26 a share with heavy downside volume. Following that move, this stock has been attempting to carve out at a bottoming chart pattern, since shares have found some buying interest over the last month at $12.26, $11.58 and $12.49 a share. Shares of Karyopharm Therapeutics have now started to rebound higher off those support levels and it's quickly moving within range of triggering a big breakout trade above some near-term overhead resistance levels.

Traders should now look for long-biased trades in Karyopharm Therapeutics if it manages to break out above some near-term overhead resistance levels at $14.80 to its 20-day moving average of $15.75 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 490,471 shares. If that breakout triggers soon, then this stock will set up to re-test or possibly take out its gap-down-day high from earlier this month at $18.95 a share.

Traders can look to buy Karyopharm Therapeutics off weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support at $12.50 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 comfortable percentage from your entry point.

Generac

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A industrial goods player that's quickly spiking within range of triggering a big breakout trade is Generac (GNRC) - Get Generac Holdings Inc. Report, which designs, manufactures and markets power generation equipment and other engine powered products for the residential, light commercial, industrial, oil and gas, and construction markets in the U.S., Canada, and internationally. This stock has been driven lower by the sellers over the last six months, with shares off sharply by 38%.

If you take a glance at the chart for Generac, you'll notice that this stock recently formed a double bottom chart pattern at $27.85 to $27.78 a share. This bottoming chart pattern is coming after a massive downtrend off its April high of $49.57 to its August low of $27.78 a share. Shares of Generac have now started to rebounded notably higher off that $27.78 low and it closed on Thursday back above its 20-day moving average of $30.34 a share with strong upside volume flows. That move is now quickly pushing this stock within range of triggering a big breakout trade above some near-term overhead resistance levels.

Traders should now look for long-biased trades in Generac if it manages to break out above its gap-down-day high from earlier this month at $30.92 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 862,011 shares. If that breakout gets started soon, then this stock will set up to re-fill some of its previous gap-down-day zone that started at $35 a share. Any high-volume move above $35 and then above more near-term overhead resistance at $35.78 will give this stock a chance to make a run at $38 to $39, or even $40 to $41 a share.

Traders can look to buy Generac off weakness to anticipate that breakout and simply use a stop that sits right around those double bottom support levels. One could 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.

EnteroMedics

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Another stock that's starting to spike within range of triggering a big breakout trade is EnteroMedics (ETRM) , which focuses on the design and development of devices that use neuroblocking technology to treat obesity, metabolic diseases, and other gastrointestinal disorders. This stock has been absolutely destroyed by sellers over the last three months, with shares down large by 75.9%.

If you take a glance at the chart for EnteroMedics, you'll notice that this stock recently formed a double bottom chart pattern at 20 cents per share over the last month or so. This potential bottom is coming after a massive downtrend over the last three months, which saw shares of EnteroMedics plunged from its June high of $1.40 to that recent 20 cents per share low. This stock has now started to spike sharply higher off that double bottom support zone and it closed back above its 20-day moving average of 26 cents per share on Thursday. That move is now quickly pushing this stock within range of triggering a near-term breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in EnteroMedics if it manages to break out above near-term overhead resistance levels at 28 to 30 cents per share and then above more key resistance levels at 34 to 36 cents per 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 1.48 million shares. If that breakout takes hold soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at 40 to 45 cents per share, or even 50 to 60 cents per share.

Traders can look to buy EnteroMedics off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at 23 to 20 cents per share. One can also buy this stock off strength once it starts to trend above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Keryx Biopharmaceuticals

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Another biopharmaceutical player that's starting to spike within range of triggering a major breakout trade is Keryx Biopharmaceuticals (KERX) - Get Keryx Biopharmaceuticals, Inc. Report, which focuses on providing therapies for patients with renal disease in the U.S. This stock has been slammed lower by the sellers over the last three months, with shares off sharply by 40.3%.

If you take a glance at the chart for Keryx Biopharmaceuticals, you'll notice that this stock has been downtrending badly for the last six months, with shares falling sharply from its high of over $14 a share to its new 52-week low of $5.25 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 Keryx Biopharmaceuticals have now started to rebound higher off that $5.25 low and it's quickly moving within range of triggering a major breakout trade.

Traders should now look for long-biased trades in Keryx Biopharmaceuticals if it manages to break out above its 20-day moving average of $6.39 a share to more key near-term overhead resistance levels at $6.50 to $7 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 1.58 million shares. If that breakout develops soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $8.11 to its 50-day moving average of $8.24, or even $9 to $10 a share.

Traders can look to buy Keryx Biopharmaceuticals off weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support levels at $5.50 to that new 52-week low of $5.25 a share. 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.

Constellium

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My final breakout trading prospect is metal fabrication player Constellium (CSTM) - Get Constellium SE Class A Report, which engages in the design, manufacture and sale of specialty rolled and extruded aluminum products for the aerospace, packaging, and automotive end-markets. This stock has been destroyed by the bears over the last six months, with shares down huge by 66.9%.

If you look at the chart for Constellium, you'll notice that this stock has been consolidating and trending sideways for the last month, with shares moving between $5.40 on the downside and $7.60 on the upside. Shares of Constellium have now started to spike a notably higher off some near-term support at $5.82 a share and that move is quickly pushing this stock within range of triggering a big breakout trade above the upper-end of its recent sideways trending chart pattern.

Traders should now look for long-biased trades in Constellium if it manages to break out above some near-term overhead resistance levels at $6.63 to $7.06 and then once it clears its 20-day moving average of $7.29 to that range high of $7.60 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 1.25 million shares. If that breakout kicks off soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $9.57 to $11, or even $11.50 to $12 a share.

Traders can look to buy Constellium to anticipate that breakout and simply use a stop that sits right below some near-term support levels at $5.82 to its recent range low of $5.40 a share. 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 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.