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.

Mosaic

Image placeholder title

One stock that's starting to trend within range of triggering a near-term breakout trade is Mosaic (MOS) - Get Report , which produces and markets concentrated phosphate and potash crop nutrients for the agricultural industry worldwide. This stock has been smacked lower by the sellers over the last six months, with shares off sharply by 41%.

If you take a look at the chart for Mosaic, you'll notice that this stock recently attempted to carve out a double bottom chart pattern over the last month, with shares finding some buying interest at $22.02 to $22.20 a share. Following that potential bottom, shares of Mosaic have started to spike higher off those support levels and this stock has trended back above its 20-day moving average of $23.80 a share. This trend 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 Mosaic if it manages to break out above its 50-day moving average of $26.18 a share and then once it clears more key resistance at $26.23 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 6.14 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 $28 to $28.67, or even $30.50 to around $32 a share.

Traders can look to buy Mosaic off weakness to anticipate that breakout and simply use a stop that sits right below its 20-day moving average of $23.80 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.

Allied Word Assurance

Image placeholder title

A financial stock that's starting to trend within range of triggering a big breakout trade is Allied World Assurance (AWH) , which provides property, casualty and specialty insurance and reinsurance solutions worldwide. This stock has been under notable selling pressure over the last six months, with shares dropping sharply by 26.8%.

If you take a glance at the chart for Allied World Assurance, you'll notice that this stock gapped-down sharply lower early this month from around $37 a share to just under $31 a share with heavy downside volume flows. Following that move, this stock has now started to stabilize and uptrend a bit, with shares moving higher from its new 52-week low of $30.29 to its recent high of $32.32 a share. That uptrend is now quickly pushing shares of Allied World Assurance within range of triggering a big breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in Allied World Assurance if it manages to break out above Thursday's intraday high of $31.87 a share and then above more key resistance at $32.32 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 810,838 shares. If that breakout materializes soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at its 20-day moving average of $33.57 to its 50-day moving average of $35.14 a share.

Traders can look to buy Allied World Assurance off weakness to anticipate that breakout and simply use a stop that sits right around some near-term support levels at $30.72 or its new 52-week low of $30.29 a share. 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.

Steelcase

Image placeholder title

Another stock that's starting to spike within range of triggering a big breakout trade is Steelcase (SCS) - Get Report , which designs, manufactures and distributes an integrated portfolio of furniture settings, user-centered technologies and interior architectural products. This stock has been hit hard by the bears over the last six months, with shares off sharply by 30.2%.

If you take a glance at the chart for Steelcase, you'll notice that this stock spiked notably higher on Thursday right off its 20-day moving average of $12.29 a share with decent upside volume flows. Prior to this spike to the upside, shares of Steelcase had been downtrending badly over the last three months, with shares falling sharply off its high of $20.21 to its new 52-week low of $11.67 a share. This stock has now attempted to carve out a double bottom over the last month, with shares finding some buying interest at $11.83 to $11.67 a share. Following this potential bottom, shares of Steelcase have now ripped higher on Thursday and its quickly moving within range of triggering a big breakout trade.

Traders should now look for long-biased trades in Steelcase if it manages to break out above some key near-term overhead resistance levels at $12.82 to $12.83 a share and then above more resistance around $13 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 1.06 million shares. If that breakout fires off soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $13.50 to $14, or even its 50-day moving average of $14.30 to $15.13 a share.

Traders can look to buy Steelcase off weakness to anticipate that breakout and simply use a stop that sits right below its 20-day moving average of $12.29 a share or near more support at $12 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.

Sunrun

Image placeholder title

Another stock that's starting to move within range of triggering a big breakout trade is Sunrun (RUN) - Get Report , which develops, owns, manages and sells residential solar energy systems. This stock has been smashed lower by the sellers over the last six months, with shares off large by 45%.

If you take a glance at the chart for Sunrun, you'll notice that this stock has been downtrending badly over the last three months, with shares collapsing off its high of $14.95 to its recent low of $4.99 a share. During that downtrend, shares of Sunrun have been making mostly lower highs and lower lows, which is bearish technical price action. That said, this stock has now started to spike higher off that $4.99 low and it's quickly moving 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 Sunrun if it manages to break out above some near-term overhead resistance levels at $5.97 to around $6 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 1.03 million shares. If that breakout gets started soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at around $7 to its 20-day moving average of $7.56, or even $8 to its 50-day moving average of $9.01 a share.

Traders can look to buy Sunrun off weakness to anticipate that breakout and simply use a stop that sits right below its recent low of $4.99 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.

Ignyta

Image placeholder title

My final breakout trading idea is Ignyta (RXDX) , which engages in discovering or acquiring, developing and commercializing new drugs for cancer patients. This stock has been trending lower over the last six months, with shares falling sharply by 26%.

If you look at the chart for Ignyta, you'll notice that this stock has been downtrending badly over the last three months, with shares collapsing off its high of $14.99 to its new 52-week low of $6.37 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 Ignyta ripped higher on Thursday right above some near-term support at $6.96 a share with decent upside volume flows. Volume for that trading session registered over 220,000 shares, which is just above its three-month average action of 198,649 shares. This high-volume spike to the upside 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 Ignyta if it manages to break out above Thursday's intraday high of $7.49 a share to some more key resistance at around $8 a share with volume that hits near or above its three-month average action of 198,649 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 $8.54 to its 20-day moving average of $8.77, or even $9 to around $10 a share.

Traders can look to buy shares of Ignyta off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $6.96 a share or just below its new 52-week low of $6.37 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 conformable percentage from your entry point. 

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