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 trade higher from current levels.

NQ Mobile


One application software player that's quickly moving within range of triggering a big breakout trade is NQ Mobile (NQ) , which mobile Internet services in the People's Republic of China and internationally. This stock has been hammered lower by the bears so far in 2014, with shares off sharply by 49%.

If you take a look at the chart for NQ Mobile, you'll notice that this stock recently formed a double bottom chart pattern at $6.59 to $6.81 a share. Following that bottom, shares of NQ have started to rip higher with the stock moving back above its 50-day moving average at $7.27 a share. That move is now starting to push shares of NQ 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 NQ if it manages to break out above some key near-term overhead resistance at $7.88 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 3.10 million shares. If that breakout triggers soon, then NQ will set up to re-test or possibly take out its next major overhead resistance levels at $9.50 to its 200-day moving average of $9.98 a share, or even $10.69 a share.

Traders can look to buy NQ off weakness to anticipate that breakout and simply use a stop that sits right around those double bottom support levels at $6.81 to $6.59 a share. One can also buy NQ 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.

T2 Biosystems

A vitro diagnostics player that's starting to move within range of triggering a major breakout trade is T2 Biosystems (TTOO - Get Report) , which develops diagnostic products based on its proprietary platform. This stock has been on fire over the last six months, since shares have jumped sharply higher by 23%.

If you take a glance at the chart for T2 Biosystems, you'll notice that this stock broke out on Monday above some key near-term overhead resistance levels at $16.70 to $16.75 a share. This stock has also been uptrending over the last month and change, with shares moving higher from its low of $13.50 to its intraday high of or $17.77 a share. During that uptrend, shares of TTOO have been consistently making higher lows and higher highs, which is bullish technical price action. This breakout on Monday is now quickly pushing shares of TTOO within range of triggering an even bigger breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in TTOO if it manages to break out above some key overhead resistance levels at $18.27 to $19 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 92,649 shares. If that breakout gets underway soon, then TTOO will set up to re-test or possibly take out its next major overhead resistance levels at $22.83 to $23.38 a share, or even its all-time high at $24.50 a share.

Traders can look to buy TTOO off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $15.89 a share or around some more key near-term support at $15.11 a share. One could also buy TTOO 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.

Media General

Another media player that's starting to trend within range of triggering a near-term breakout trade is Media General (MEG) , which owns and operates broadcast television stations, and related Websites and mobile news applications in the U.S. This stock has been hit hard by the sellers so far in 2014, with shares down sharply by 32%.

If you take a glance at the chart for Media General, you'll see that this stock has been trending sideways for the last two months, with shares moving between $12.45 on the downside and $15.50 on the upside. Shares of MEG have recently started to trend back above its 50-day moving average of $14.23 a share. That move is starting to push this stock within range of triggering a near-term breakout trade above the upper-end of its recent sideways trading chart pattern.

Traders should now look for long-biased trades in MEG if it manages to break out above some key near-term overhead resistance levels at $15.42 to $15.50 a share with high volume. Watch for a sustained move or close above those levels with volume that hits near or above its three-month average action of 566,709 shares. If that breakout develops soon, then MEG will set up to re-test or possibly take out its next major overhead resistance level at $16.28 to its 200-day moving average of $16.90 a share, or even $19.11 a share.

Traders can look to buy MEG off weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support levels at $14.32 to $13.64 a share. One can also buy MEG off strength once it starts to move above those breakout levels share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

ExOne

Another 3D printing player that's starting to trend within range of triggering a near-term breakout trade is ExOne (XONE - Get Report) , which manufactures and sells three dimensional printing machines and printing products in the Americas, Europe, and Asia. This stock has been destroyed by the sellers so far in 2014, with shares down huge by 62%.

If you take a glance at the chart for ExOne, you'll see that this stock has been uptrending over the last few weeks, with shares moving higher from its low of $18.88 to its recent high of $23 a share. During that uptrend, shares of XONE have been making mostly higher lows and higher highs, which is bullish technical price action. This stock has also just started to trend back above its 50-day moving average of $21.93 a share. Shares of XONE are now quickly moving within range of triggering a near-term breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in XONE if it manages to break out above Monday's intraday high of $22.76 a share and then above some key near-term overhead resistance at $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 volume of 558,172 shares. If that breakout begins soon, then XONE will set up to re-test or possibly take out its next major overhead resistance levels at $26.46 to $30 a share, or even its 200-day moving average of around $31 a share.

Traders can look to buy XONE off weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support levels at $20.70 to around $20 a share. One can also buy XONE off strength once it starts to burst above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

3D Systems

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My final breakout trading prospect is 3D printing player 3D Systems (DDD - Get Report) , which operates as a provider of 3D printing centric design-to-manufacturing solutions in the U.S., Germany, the Asia-Pacific, and other European countries. This stock has hammered by the bears so far in 2014, with shares down large by 59%.

If you look at the chart for 3D Systems, you'll notice that this stock has been downtrending badly for the last five months, with shares falling sharply from over $67 a share to its recent 52-week low of $32.64 a share. During that downtrend, shares of DDD have been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of DDD have now started to bounce off that 52-week low of $32.64 a share and it's beginning to move within range of triggering a major breakout trade.

Traders should now look for long-biased trades in DDD if it manages to break out above some key near-term overhead resistance levels at $38.66 to $39.15 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 3.20 million shares. If that breakout gets started soon, then DDD will set up to re-fill some of its previous gap-down-day zone from late October that started at $44.27 a share.

Traders can look to buy DDD off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $35 a share or near its 52-week low of $32.64 a share. One can also buy DDD 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.

To see more breakout candidates, check out the Breakout Stocks of the Week portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.