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.

AcelRx Pharmaceutical

One specialty pharmaceutical player that's starting to move within range of triggering a major breakout trade is AcelRx Pharmaceuticals  (ACRX - Get Report), which develops and commercializes therapies for the treatment of acute pain. This stock has been hit hard by the sellers over the last six months, with shares down sharply by 31.7%.

If you take a look at the chart for AcelRx Pharmaceuticals, you'll notice that this stock has been consolidating and trending sideways over the last two months, with shares moving between $3.50 on the downside and $4.50 on the upside. Shares of AcelRx Pharmaceuticals ripped notably higher on Thursday right off its 20-day moving average of $4.17 a share with decent upside volume flows. That spike to the upside is now starting to push 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 AcelRx Pharmaceutical if it manages to break out above some key near-term overhead resistance at $4.50 a share and then above more resistance levels at $4.90 to $4.99 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 611,446 shares. If that breakout starts to power soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $5.53 to right around its gap-down-day high from March at just above $6 a share.

Traders can look to buy AcelRx Pharmaceutical off weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support levels at $4.07 to its 50-day moving average of $3.93 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 comfortable percentage from your entry point.

Oragenics


A biotechnology player that's starting to spike within range of triggering a major breakout trade is Oragenics  (OGEN), which develops, markets and sells oral probiotics products and antibiotics for humans and companion pets. This stock has been exploding to the upside over the last three months, with shares soaring higher by 105.3%.

If you take a glance at the chart for Oragenics, you'll notice that this stock has been uptrending over the last month and change, with shares moving higher from its low of $1.26 to its recent high of $1.97 a share. During that uptrend, this stock has been making mostly higher lows and higher highs, which is bullish technical price action. Shares of Oragenics ripped to the upside on Thursday right off its 20-day moving average of $1.60 a share with strong upside volume flows. That move has now pushed shares of Oragenics 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 Oragenics if it manages to break out above some key near-term overhead resistance levels at $1.93 to $1.97 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 159,779 shares. If that breakout hits soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $2.20 to its 52-week high of $2.64 a share.

Traders can look to buy Oragenics off weakness to anticipate that breakout and simply use a stop that sits right around its 20-day moving average of $1.60 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.

RCS Capital


Another stock that's starting to trend within range of triggering a near-term breakout trade is RCS Capital  (RCAP), which engages in the independent retail advice, wholesale distribution, investment banking, capital markets, investment management and investment research businesses. This stock has been smashed lower by the sellers over the last six months, with shares off sharply by 48.6%.

If you take a glance at the chart for RCS Capital, you'll see that this stock has been downtrending badly over the last six months, with shares plunging lower from around $12 to its new 52-week low of $4.79 a share. During that downtrend, shares of RCS Capital have been consistently making lower highs and lower lows, which is bearish technical price action. That said, this stock has now started to attempt to carve out a bottoming chart pattern, since shares have found some buying interest at $4.79 to $4.93 a share over the last few weeks. Shares of RCS Capital are now starting to rip higher off those support levels and it's quickly moving within range of triggering a near-term breakout trade.

Traders can look to buy RCS Capital off weakness to anticipate that breakout and simply use a stop that sits right around those recent support levels at $4.93 to its 52-week low of $4.79 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.

Pacific Biosciences of California


Another biotechnology player that's starting to rip within range of triggering a big breakout trade is Pacific Biosciences of California  (PACB - Get Report), which designs, develops, manufactures, and markets an integrated platform for genetic analysis. This stock has been hit hard by the sellers over the three months, with shares off sharply by 27.7%.

If you take a glance at the chart for Pacific Biosciences of California, you'll see that this stock ripped sharply to the upside on Thursday right off its 20-day moving average of $5.38 and back above its 50-day moving average of $5.56 with monster upside volume flows. Volume on the day registered over 2.98 million shares traded versus its three-month average action of just 536,194 a share. This powerful high-volume move to the upside is now quickly pushing shares of Pacific Biosciences of California within range of triggering a big breakout trade above a key downtrend line that dates back to February.

Traders should now look for long-biased trades in Pacific Biosciences of California if it manages to break out above that key downtrend line that will trigger over $5.83 to $6.07 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 536,194 shares. If that breakout gets underway soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $6.30 to $6.55, or even $7 to $7.30 a share.

Traders can look to buy Pacific Biosciences of California off weakness to anticipate that breakout and simply use a stop that sits right below its 20-day moving average of $5.38 a share or around more near-term support at $5.25 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 comfortable percentage from your entry point.

NOW


My final breakout trading prospect is energy player NOW  (DNOW - Get Report), which distributes energy and industrial products in the U.S., Canada, and internationally. This stock has been moving to the downside over the last three months, with shares off by 14%.

If you look at the chart for NOW, you'll notice that this stock has been downtrending badly for the last two months and change, with shares moving to the downside off its May high of $25.86 to its new 52-week low of $18.02 a share. During that downtrend, shares of NOW have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of NOW have now started to rip higher right above that $18.02 low and it's now quickly moving 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 NOW if it manages to break out above some near-term overhead resistance levels at $19.83 to around $20 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 863,119 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 its 50-day moving average of $21.51 to $22.17, or even $23 to $24 a share.

Traders can look to buy NOW off weakness to anticipate that breakout and simply use a stop that sits right around Thursday's intraday low of $18.47 or around its new 52-week low of $18.02 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 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.