Another stock that's setting up to trigger a near-term breakout trade is biotechnology and drugs player Amarin ( AMRN), a late-stage biopharmaceutical company with expertise in lipid science focused on the treatment of cardiovascular disease. This stock has been on fire so far in 2012 with shares up over 90%.

This company has a major catalyst on the horizon, since it will go in front of the FDA on July 26 for the possibly approval of AMR101. (The stock shows up on a list of 4 Drug Stocks Facing FDA Approval Decisions in July.) AMR101 is a prescription-grade omega-3 fatty acid that is designed for the treatment of patients with very high triglyceride levels. With that major event just around the corner, this stock is a great candidate for a quick breakout trade ahead of the event.

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If you look at the chart for Amarin, you'll notice that this stock has been in a monster uptrend for the past four months, with shares soaring from a low of $7.01 to a recent high of $15.60 a share. During that massive move higher, shares of AMRN have consistently made higher lows and higher highs, which is bullish technical price action. That move has now pushed AMRN within range of triggering a near-term breakout trade. If that trade triggers, then AMRN could run pretty big ahead of its FDA meeting on July 26.

Traders should now look for long-biased traders in AMRN if this stock can manage to trigger a break out above some near-term overheard resistance at $15.60 a share with high-volume. Look for a sustained move or close above $15.60 with volume that hits near or above its three-month average action of 4.8 million shares. If we get that action soon, then AMRN could easily hit $20 a share before its FDA meeting.

I would look to buy AMRN off strength for this trade once it clears $15.60 with high-volume, and simply use a stop at around $15 or a bit higher. If you decide to buy off weakness, then I would use that recent low of $13.63 for possibly stop. This trade idea is only for a move prior to the meeting, so make sure if we get a quick pop to just take the profits.

The reason I like this idea ahead of the FDA meeting, is because the current short interest as a percentage of the float for AMRN is very high at 14.6%. If AMRN takes out $15.60 with volume, then the shorts are going to panic and think the market is betting big on an FDA approval. This could easily spark a massive short-squeeze in a very short timeframe, so keep AMRN on your radar as July 26 approaches.

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