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.

Albany Molecular Research


One stock that's starting to move within range of triggering a big breakout trade is Albany Molecular Research  (AMRI), which provides integrated drug discovery, development and manufacturing services primarily in the U.S., Europe and Asia. This stock has been trending to the upside over the last three months, with shares higher by 18.3%.

If you take a look at the chart for Albany Molecular Research, you'll see that this stock has been uptrending over the last five months, with shares moving higher from its low of $13.73 to its recent high of $19.55 a share. During that uptrend, shares of AMRI have been making mostly higher lows and higher highs, which is bullish technical price action. Shares of AMRI spiked higher on Thursday back above its 200-day moving average of $18.56 and within range of triggering a near-term breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in AMRI if it manages to break out above some near-term overhead resistance levels at $19.35 to $19.55 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 429,313 shares. If that breakout hits soon, then AMRI will set up to re-fill its previous gap-down-day zone from last November that started at around $24 a share.

Traders can look to buy AMRI off weakness to anticipate that breakout and simply use a stop that sits right around its 50-day moving average of $17.84 a share. One can also buy AMRI 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.

ChannelAdvisor


A technology stock that's starting to trend within range of triggering a major breakout trade is ChannelAdvisor  (ECOM - Get Report), which provides software-as-a-service solutions worldwide. This stock has been moving sharply to the upside over the last three months, with shares higher by 17.6%.

If you take a glance at the chart for ChannelAdvisor, you'll notice that this stock has been uptrending over the last three months, with shares moving higher from its low of $8.22 to its recent high of $11.90 a share. During that uptrend, shares of ECOM have been making mostly higher lows and higher highs, which is bullish technical price action. Shares of ECOM bounced higher on Thursday right above some near-term support at $10.21 and its 50-day moving average of $10.16 a share. That bounce is quickly pushing shares of ECOM within range of triggering a major breakout trade.

Traders should now look for long-biased trades in ECOM if it manages to break out above some near-term overhead resistance levels at Thursday's intraday high of $11.25 a share and then above some more key overhead resistance at $11.90 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 408,445 shares. If that breakout develops soon, then ECOM will set up to re-fill some of its previous gap-down-day zone from January that started around $22 a share.

Traders can look to buy ECOM off weakness to anticipate that breakout and simply use a stop that sits around some near-term support levels at $10.21 to its 50-day moving average of $10.16 a share. One could also buy ECOM 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.

GOL Linhas Aereas Inteligentes

A regional airlines player that's starting to move within range of triggering a major breakout trade is GOL Linhas Aereas Inteligentes (GOL), which provides regular and non-regular air transportation services for passengers, cargoes and mailbags in Brazil and internationally. This stock has been smacked lower by the bears over the last three months, with shares down sharply by 45.3%.

If you take a glance at the chart for GOL Linhas Aereas Inteligentes, you'll see that this stock has been uptrending a bit over the last month, with shares moving higher from its low of $2.31 to its recent high of $2.87 a share. During that uptrend, shares of GOL have been making mostly higher lows and higher highs, which is bullish technical price action. This move is coming after shares of GOL came out of a nasty downtrend that took the stock from $5.81 to that $2.31 low in the matter of a few months. Now shares of GOL are starting to spike higher off some near-term support at $2.61 a share and it's beginning to move within range of triggering major breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in GOL if it manages to break out above some key overhead resistance levels at $2.87 to $3 a share and then above $3.10 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 1.92 million shares. If that breakout materializes soon, then GOL will set up to re-test or possibly take out its next major overhead resistance levels at $3.50 to $3.75 a share, or even $4 to $4.50 a share.

Traders can look to buy GOL off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $2.61 to $2.52 a share. One can also buy GOL off strength once it starts to push strongly above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Galena Biopharma

A biotechnology stock that's starting to trend within range of triggering a near-term breakout trade is Gale Biopharma  (GALE), which focuses on developing and commercializing oncology therapeutics that address major unmet medical needs across cancer care. This stock has been trending sharply to the downside over the last three months, with shares lower by 24.3%.

If you take a glance at the chart for Galena Biopharma, you'll notice that this stock has been consolidating and basing for the last two months, with shares moving between $1.30 on the downside and $1.55 on the upside. This base is coming after shares of GALE plunged lower from its March high of $2.12 share and gapped down from over $1.70 a share to $1.33 a share. Shares of GALE are now starting to spike higher off some near-term support at $1.36 a share with strong upside volume flows. That move is starting to push the stock within range of triggering a near-term breakout trade above the upper-end of its recent sideways trending chart pattern.

Traders should now look for long-biased trades in GALE if it manages to break out above some key near-term overhead resistance levels at $1.45 to $1.48 a share and then above $1.55 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 2.52 million shares. If that breakout develops soon, then GALE will set up to re-fill some of its previous gap-down-day zone from March that started at $1.75 a share. Any high-volume move above $1.75 will then give GALE a chance to tag $1.85 to $1.95 a share.

Traders can look to buy GALE off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $1.36 a share. One can also buy GALE 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.

Schnitzer Steel Industries


My final breakout trading prospect is steel and iron player Schnitzer Steel Industries  (SCHN - Get Report), which manufactures and exports recycled ferrous metal products worldwide. This stock has been slammed lower by the bears over the last six months, with shares down large by 29.5%.

If you look at the chart for Schnitzer Steel Industries, you'll notice that this stock is attempting to form a major bottoming chart pattern over the last two months, with shares finding buying interest each time it has pulled back under $16 a share. This possible bottom is coming out of a nasty downtrend that took the stock lower from its last November high of $23.90 to its recent low of $15.06 a share. Shares of SCHN are now starting to spike higher right above those recent support levels under $16 and it's quickly moving within range of triggering a big breakout trade.

Traders should now look for long-biased trades in SCHN if it manages to break out above some key near-term overhead resistance levels at $16 to $16.31 a share and then above $16.94 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 436,542 shares. If that breakout hits soon, then SCHN will set up to re-test or possibly take out its next major overhead resistance levels at $17.85 to $20.50 a share.

Traders can look to buy SCHN off weakness to anticipate that breakout and simply use a stop that sits right around its new 52-week low of $15.06 a share. One can also buy SCHN 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.

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