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.

Calithera Biosciences

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One clinical-stage biopharmaceutical player that's starting to move within range of triggering a near-term breakout trade is Calithera Biosciences (CALA) - Get Report, which focuses on discovering and developing small molecule drugs directed against tumor metabolism and tumor immunology targets for the treatment of cancer in the U.S. This stock has been slammed lower by the sellers over the last six months, with shares down huge by 61.9%.

If you take a look at the chart for Calithera Biosciences, you'll see that this stock has been downtrending badly for the last four months and change, with shares falling sharply lower from its high of $22 to its recent low of $6.60 a share. During that downtrend, this stock has been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of Calithera Biosciences have now started to stabilize over the last month, with shares moving between $6.60 on the downside and $7.54 on the upside. This stock has started to spike higher off that $6.60 low and it's now beginning to move within range of triggering a near-term breakout trade above the upper-end of its recent sideways trending chart pattern.

Traders should now look for long-biased trades in Calithera Biosciences if it manages to break out above its 20-day moving average of $7.34 a share and then above some key near-term overhead resistance levels at $7.40 to $7.54 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 503,176 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 $9 to $9.69 a share, or even $11 a share.

Traders can look to buy Calithera Biosciences off weakness to anticipate that breakout and simply use a stop that sits right around its recent low of $6.60 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.

Akebia Therapeutics

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A biopharmaceutical player that's starting to trend within range of triggering a major breakout trade is Akebia Therapeutics (AKBA) - Get Report, which focuses on the development and commercialization of proprietary therapeutics based on hypoxia inducible factor biology for patients with kidney disease. This stock has been jumping to the upside over the last three months, with shares higher by 14.4%.

If you take a glance at the chart for Akebia Therapeutics, you'll see that this stock spiked sharply higher on Thursday right off its 20-day moving average of $9.32 a share with lighter-than-average volume. This move to the upside also triggered right above a key downtrend line that started back in June off the $7.61 level. Shares of Akebia Therapeutics are now starting to trend within range of triggering a major breakout trade above a key downtrend line that dates back to its March high.

Traders should now look for long-biased trades in Akebia Therapeutics if it manages to break out above that downtrend line that will trigger over $10.40 to $10.64 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 502,152 shares. If that breakout triggers soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $11.15 to $11.51 a share, or even $12 to $13 a share.

Traders can look to buy Akebia Therapeutics off weakness to anticipate that breakout and simply use a stop that sits right around its 20-day moving average at $9.32 or around that major uptrend line at $9 a share. 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.

Healthways

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Another health care stock that's starting to spike within range of triggering a major breakout trade is Healthways (HWAY) , which provides population health management solutions to help people to enhance well-being and health. This stock has been smacked lower by the sellers over the last three months, with shares sharply lower by 34.9%.

If you take a glance at the chart for Healthways, you'll notice that this stock recently gapped down sharply lower from over $15 a share to right around $12 a share with heavy downside volume flows. This gap to the downside occurred right in the midst of a massive downtrend over the last five months, that saw shares of Healthways fall from over $23 to its new 52-week low of $11.37 a share. Shares of Healthways went on to print a new 52-week low after the gap at $11.37 a share. This stock has now started to rebound off that $11.37 low and it's beginning to spiked back above its 20-day moving average of $12.35 a share. That spike has now quickly started to push shares of Healthways within range of triggering a major breakout trade.

Traders should now look for long-biased trades in Healthways if it manages to break out above some key near-term overhead resistance levels at $12.65 to right around $13 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 680,862 shares. If that breakout materializes soon, then this stock will set up to re-fill some of its previous gap-down-day zone from June that started near $16 a share.

Traders can look to buy Healthways off weakness to anticipate that breakout and simply use a stop that sits right around some near-term support at $12 a share or down near its 52-week low of $11.37 a 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.

GenMark Diagnostics

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Another molecular diagnostics player that's starting to trend within range of triggering a big breakout trade is GenMark Diagnostics (GNMK) - Get Report, which develops, manufactures, sells, and supports instruments and molecular tests based on its proprietary eSensor detection technology in the U.S. This stock has been hit hard by the sellers over the three months, with shares sharply lower by 26%.

If you take a glance at the chart for GenMark Diagnostics, you'll see that this stock recently blew out its previous lows at around $9.02 to $8.90 a share. Once those previous lows were broken, shares of GenMark Diagnostics went on to make a new 52-week low at $8.44 a share. This stock has now started to reverse to the upside off that $8.44 low with some strong upside volume days, and it has now started to trend back above both its 20-day and 50-day moving averages. That reversal is now quickly pushing shares of GenMark Diagnostics within range of triggering a big breakout trade a key downtrend line that dates back to March.

Traders should now look for long-biased trades in GenMark Diagnostics if it manages to break out above that key downtrend line that will trigger above $9.80 to around $10 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 208,162 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 $10.50 to $10.84 a share, or even its 200-day moving average of $11.28 to possible even $13 a share.

Traders can look to buy GenMark Diagnostics off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $9 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 comfortable percentage from your entry point.

Otonomy

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My final breakout trading prospect is clinical-stage biopharmaceutical player Otonomy (OTIC) - Get Report, which focuses on the development and commercialization of therapeutics for the treatment of diseases and disorders of the ear in the U.S. and Canada. This stock has been dumped by the sellers over the last three months, with shares sharply to the downside by 23.4%.

If you look at the chart for Otonomy, you'll notice that this stock has been consolidating and trending sideways over the last two months, with shares moving between $20.99 on the downside and $25.73 on the upside. Shares of Otonomy recently spiked higher back above its 20-day moving average of $22.92 a share. That spike is now quickly pushing shares of Otonomy 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 Otonomy if it manages to break out above some near-term overhead resistance levels at its 50-day moving average of $25.24 a share to some more key resistance at $25.73 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 246,563 shares. If that breakout gets set soon, then this stock will set up to re-fill some of its previous gap-down-day zone from May that started near $32 a share.

Traders can look to buy Otonomy off weakness to anticipate that breakout and simply use a stop that sits right around its 20-day at $22.92 a share or near more support at $22 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 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.