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.

Navient

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One credit services player that's starting to trend within range of triggering a big breakout trade is Navient (NAVI) - Get Navient Corp Report, which provides financial products and services in the U.S. This stock has been smacked lower by the sellers over the last three months, with shares off sharply by 34.8%.

If you take a look at the chart for Navient you'll notice that this stock recently formed a double bottom chart pattern, after shares found some buying interest at $11.85 to $11.79 a share. That potential bottoming is happening after shares of Navient plunged off its April high of $20.50 to its new 52-week low of $11.79 a share. This stock spiked notably higher on Thursday right above those double bottom support levels with heavy upside volume flows. That spike is now quickly pushing this stock within range of triggering a big breakout trade.

Traders should now look for long-biased trades in Navient if it manages to break out above some near-term overhead resistance levels at $12.99 to its 20-day moving average of $13.08 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 3.10 million 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 $14 to $15, or even $16 to $16.75 a share.

Traders can look to buy Navient 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 take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

DAVIDsTEA

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A beverage player that's starting to trend within range of triggering a big breakout trade is DAVIDsTEA (DTEA) - Get DAVIDsTEA, Inc. Report, which provides a selection of loose-leaf teas, pre-packaged teas, tea sachets and tea-related gifts and accessories in Canada and the U.S. This stock has spiked modestly higher over the last three months, with shares up by 5.2%.

If you take a glance at the chart for DAVIDsTEA, you'll notice that this stock has been downtrending badly over the last three months and change, with shares falling sharply lower from its IPO high of $29.97 to its all-time low of $11.74 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 DAVIDsTEA have now started to potentially reverse that downtrend and enter a short-term uptrend, with the stock making higher lows and higher highs over the last few weeks. That trend reversal is starting to push this stock within range of triggering a big breakout trade.

Traders should now look for long-biased trades in DAVIDsTEA if it manages to break out above some near-term overhead resistance levels at $14.57 to $15 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 198,983 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 its 50-day moving average of $16.08 to around $18, or even $20 to $21 a share.

Traders can look to buy DAVIDsTEA off weakness to anticipate that breakout and simply use a stop that sits right around its 20-day moving average of $13.11 or near more key support at $12.41 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.

Axovant Sciences

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Another clinical-stage biopharmaceutical player that's starting to move within range of triggering a major breakout trade is Axovant Sciences (AXON) - Get Axovant Gene Therapies Ltd. Report, which focuses on the acquisition, development and commercialization of therapeutics for the treatment of neurodegenerative disorders. This stock has been hammered lower by the sellers over the last six months, with shares down sharply by 54.6%.

If you take a glance at the chart for Axovant Sciences, you'll notice that this stock has been uptrending over the last month and change, with shares moving higher from its all-time low of $9.99 to its recent high of $14.10 a share. During that uptrend, this stock has been making mostly higher lows and higher highs, which is bullish technical price action. Shares of Axovant Sciences ripped sharply higher on Thursday right off its 20-day moving average of $12.32 a share. That sharp move to the upside is now quickly pushing this stock within range of triggering a major breakout trade above some key near-term overhead resistance levels.

Traders should now look for long-biased trades in Axovant Sciences if it manages to break out above near-term overhead resistance levels at $13.72 to $14.10 a share and then above its 50-day moving average of $14.58 a 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 950,229 shares. If that breakout gets set off soon, then this stock will set up to re-test or possibly take out its next major overhead resistance level at $16.37 a share. Any high-volume move above that level will then give shares of Axovant Sciences a chance to make a run at $18 to $19 a share.

Traders can look to buy Axovant Sciences off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at around $12.16 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.


Sorrento Therapeutics

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Another biopharmaceutical player that's starting to trend within range of triggering a near-term breakout trade is Sorrento Therapeutics (SRNE) - Get Sorrento Therapeutics, Inc. Report, which focuses on the discovery, acquisition, development and commercialization of proprietary drug therapeutics for addressing unmet medical needs in the U.S., Europe, and internationally. This stock is down slightly over the last three months, with shares off by 6.5%.

If you take a glance at the chart for Sorrento Therapeutics, you'll notice that this stock has been downtrending badly for the last two months and change, with shares falling sharply off its high of $26.80 to its recent low of $11.27 a share. During that downtrend, shares of Sorrento Therapeutics have been consistently making lower highs and lower lows, which is bearish technical price action. That said, this stock has now started to rebound higher off at $11.27 low and it's beginning to move within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in Sorrento Therapeutics if it manages to break out above some key near-term overhead resistance levels at its 20-day moving average of $13.45 a share and then above more resistance at $13.67 to around $14 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 807,084 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 $16 to its 50-day moving average of $17.28, or even $18 to $19 a share.

Traders can look to buy Sorrento Therapeutics off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $12.15 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.

Merrimack Pharmaceuticals

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My final breakout trading prospect is biopharmaceutical player Merrimack Pharmaceuticals (MACK) - Get Merrimack Pharmaceuticals, Inc. Report, which engages in discovering, developing and preparing to commercialize medicines paired with companion diagnostics for the treatment of cancer primarily in the U.S. This stock is down modestly over the last three months, with shares lower by 8.1%.

If you look at the chart for Merrimack Pharmaceuticals, you'll notice that this stock has been uptrending over the last few weeks, with shares ripping higher off its low of $8.26 to its recent high of $11 a share. During that uptrend, shares of Merrimack Pharmaceuticals have been making mostly higher lows and higher highs, which is bullish technical price action. This stock spiked higher on Thursday right off some near-term support at $10 a share and back above its 20-day moving average of $10.12 a share with decent upside volume flows. This move to the upside is now quickly pushing this stock within range of triggering near-term breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in Merrimack Pharmaceuticals if it manages to break out above its 50-day moving average of $10.54 to $10.63 a share and then above its 200-day moving average of $11.06 to more resistance at $11.18 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 1.35 million 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 $12.32 to $13, or even $13.26 to its 52-week high of $13.84 a share.

Traders can look to buy Merrimack Pharmaceuticals to anticipate that breakout and simply use a stop that sits right below some key near-term support at $10 a share or near more key support around $9.46 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.