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.

BG Medicine

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One health care player that's starting to spike higher within range of triggering a major breakout trade is BG Medicine (BGMD) , which engages in developing and commercializing diagnostic products used to guide the patients suffering from heart failure and related disorders. This stock has been annihilated by the sellers over the last six months, with shares plunging sharply lower by 73.1%.

If you take a look at the chart for BG Medicine, you'll notice that this stock recently gapped down sharply lower from over $1.50 a share to under $1 a share with heavy downside volume. Following that move, shares of BG Medicine went on to print a new 52-week low at 75 cents per share. That said, this stock ripped to the upside on Thursday and displayed relative strength in a major market decline and it did it with volume. Volume for that trading session registered over 361,000 shares, which is well above its three-month average action of 153,734 shares. That spike to the upside on Thursday is now quickly pushing shares of BG Medicine within range of triggering a major breakout trade.

Traders should now look for long-biased trades in BG Medicine if it manages to break out above some key near-term overhead resistance levels at 92 cents per share and then above its gap-down-day high of 95 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 153,734 shares. If that breakout develops soon, then this stock will set up to re-fill some of its previous gap-down-day zone that started above $1.50 a share.

Traders can look to buy BG Medicine off weakness to anticipate that breakout and simply use a stop that sits right around 80 cents per share or near its new 52-week low of 75 cents per 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.

Alliance Holdings

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A basic materials player that's trending within range of triggering a big breakout trade is Alliance Holdings (AHGP) , which produces and markets coal primarily to utilities and industrial users in the U.S. This stock has been smacked lower by the sellers over the last six months, with shares off sharply by 29.5%.

If you take a glance at the chart for Alliance Holdings, you'll notice that this stock has been uptrending a bit over the last month, with shares moving higher from its low of $33.62 to its recent high of $37.39 a share. During that uptrend, this stock has been making mostly higher lows and higher highs, which is bullish technical price action. Shares of Alliance Holdings displayed relative strength on Thursday during a major market meltdown, and that strength 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 Alliance Holdings if it manages to break out above some key near-term overhead resistance levels at $37.39 to its 50-day moving average of $37.53 and then above more resistance at $38.02 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 105,431 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 $39 to $40, or even $42 to $46 a share.

Traders can look to buy Alliance Holdings off weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support at $35.11 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.

Natural Resource Partners 

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Another basic materials player that's starting to trend within range of triggering a big breakout trade is Natural Resource Partners (NRP) - Get Report, which owns, manages, and leases mineral properties in the U.S. This stock has been smashed lower by the sellers over the last six months, with shares down huge by 64.5%.

If you take a glance at the chart for Natural Resource Partners LP, you'll notice that this stock recently formed a double bottom chart pattern, after shares found buying interest at $2.22 to $2.21 a share. That bottom formed after this stock came out of a massive downtrend from March to June, that saw shares of Natural Resource Partners LP collapse from around $8 a share to its new 52-week low of $2.21 a share. This stock displayed relative strength on Thursday versus a downtrending market after it spiked higher right above some near-term support at $2.57 a share. That spike 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 Natural Resource Partners LP if it manages to break out above some key near-term overhead resistance levels at $3.02 to its 50-day moving average of $3.09 a share and then above more key resistance at $3.17 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 676,427 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 $3.50 to $3.70, or even $3.80 to $4.03 a share.

Traders can look to buy Natural Resource Partners LP off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $2.57 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.

Sally Beauty

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Another specialty retailer player that's starting to spike within range of triggering a major breakout trade is Sally Beauty (SBH) - Get Report, which is a distributor of professional beauty supplies primarily in North America, South America, and Europe. This stock has been driven lower by the sellers over the last six months, with shares off by 20.3%.

If you take a glance at the chart for Sally Beauty, you'll see that this stock recently gapped down sharply lower from around $30 a share to its new 52-week low of $25.40 a share with massive downside volume flows. Following that move, shares of Sally Beauty have now attempted to carve out a double bottom chart pattern, with shares finding buying interest at $25.40 to $25.52 a share. This stock showed relative strength on Thursday after it spiked to the upside right above those double bottom support levels, and it did with above-average volume. That move is now quickly pushing shares of Sally Beauty within range of triggering a major breakout trade.

Traders should now look for long-biased trades in Sally Beauty if it manages to break out above some key near-term overhead resistance levels at $27 to $27.62 a share and then above its 20-day moving average of $27.91 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 1.57 million shares. If that breakout kicks off soon, then this stock will set up to re-fill some of that previous gap-down-day zone from earlier this month that started near $30 a share.

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

RCM Technologies

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My final breakout trading prospect is staffing and outsourcing services player RCM Technologies (RCMT) - Get Report, which designs, develops and implements business and technology solutions to commercial and government sectors in the U.S., Canada and Puerto Rico. This stock has been slapped down by the sellers over the last six months, with shares off sharply by 18.7%.

If you look at the chart for RCM Technologies, you'll notice that this stock spiked modestly to the upside on Thursday and showed some relative strength versus the major market decline, and it did with monster upside volume flows. Volume for that trading session registered over 500,000 shares, which is well above its three-month average action of 23,000 shares. That high-volume move to the upside is now quickly pushing shares of RCM Technologies within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in RCM Technologies if it manages to break out above its 20-day moving average of $4.94 a share and then above more key near-term overhead resistance levels at $5 to $5.07 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 23,000 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 50-day moving average of $5.35 to its 200-day moving average of $5.98, or even $6.15 to $6.50 a share.

Traders can look to buy RCM Technologies to anticipate that breakout and simply use a stop that sits right below some near-term support at $4.50 or around its new 52-week low of $4.16 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.