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.

Inotek Pharmaceuticals

One clinical-stage biopharmaceutical player that's starting to trend within range of triggering a big breakout trade is Inotek Pharmaceuticals  (ITEK) , which focuses on the discovery, development and commercialization of therapies for glaucoma. This stock has been under selling pressure over the last three months, with shares down sharply by 29.7%.

If you take a look at the chart for Inotek Pharmaceuticals, you'll notice that this stock has been uptrending a bit over the last month, with shares moving higher off its low of $8.61 to its recent high of $12.25 a share. During that uptrend, shares of Inotek Pharmaceuticals have been making mostly higher lows and higher highs, which is bullish technical price action. This stock ripped sharply higher on Thursday right off its 20-day moving average of $10.14 a share with lighter-than-average volume. This move is now quickly pushing this stock 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 Inotek Pharmaceuticals if it manages to break out above its 50-day moving average of $11.60 a share and then once it takes out more key near-term overhead resistance at $12.25 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 695,508 shares. If that breakout gets sparked soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $13 to $14, or even $15.50 to $16.44 a share.

Traders can look to buy Inotek Pharmaceuticals off weakness to anticipate that breakout and simply use a stop that sits right below its 20-day moving average of $10.14 a share or just below $10 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.

ProNAi Therapeutics


A clinical-stage oncology player that's starting to spike within range of triggering a near-term breakout trade is ProNAi Therapeutics  (DNAI) , which develops and commercializes a class of therapeutics based on its DNA interference technology platform. This stock has been destroyed by the sellers over the last six months, with shares down large by 45.3%.

If you take a glance at the chart for ProNAi Therapeutics, you'll notice that this stock has been downtrending badly over the last two months, with shares crashing lower off its high of $32.99 to its new all-time low of $15.75 a share. During that plunge, shares of ProNAi Therapeutics have been consistently making lower highs and lower lows, which is bearish technical price action. That said, this stock has recently attempted to carve out a double bottom chart pattern, after shares of ProNAi Therapeutics found some buying interest at $16.09 to $15.75 a share. This stock has now started to spike higher off that $15.75 low and its beginning to trend within range of triggering a near-term breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in ProNAi Therapeutics if it manages to break out above some key near-term overhead resistance levels at $18 to $19.46 a share and then above more resistance at $20.18 to right around $21 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 143,962 shares. If that breakout fires off 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 $23.83 to possibly $26 a share.

Traders can look to buy ProNAi Therapeutics off weakness to anticipate that breakout and simply use a stop that sits right below its all-time low of $15.75 a share. One could also buy this stock off strength once it starts to move above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.Tired of Stocks? Invest Your Money Here Instead

Karyopharm Therapeutics


Another clinical-stage pharmaceutical player that's starting to move within range of triggering a big breakout trade is Karyopharm Therapeutics  (KPTI - Get Report) , which focuses on the discovery and development of drugs directed against nuclear transport targets for the treatment of cancer and other major diseases. This stock has been pounded lower by the bears over the last six months, with shares off large by 53.5%.

If you take a glance at the chart for Karyopharm Therapeutics, you'll notice that this stock has been uptrending over the last month, with shares moving higher off its low of $10 a share to its recent high of $14.66 a share. During that uptrend, this stock has been making mostly higher lows and higher highs, which is bullish technical price action. That trend has also pushed this stock back above both its 20-day moving average of $12.42 a share and its 50-day moving average of $13.13 a share. Shares of Karyopharm Therapeutics are now starting to spike within range of triggering a big breakout trade above a key downtrend line that dates back to August.

Traders should now look for long-biased trades in Karyopharm Therapeutics if it manages to break out above that key downtrend line that will trigger over resistance levels at $14.13 to $14.66 a share and then above more resistance at $15.70 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 534,991 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 level at its gap-down-day high from August at $19 a share. Any high-volume move above $19 will then give this stock a chance to re-fill some of its previous gap-down-day zone that started at $22 a share.

Traders can look to buy Karyopharm Therapeutics off weakness to anticipate that breakout and simply use a stop that sits right below its 20-day moving average of $12.42 a share or near more key support at $11.59 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.

Triumph Group


Another industrial goods player that's quickly moving within range of triggering a big breakout trade is Triumph Group  (TGI - Get Report) , which designs, engineers, manufactures, repairs, overhauls, and distributes aero structures, aircraft components, accessories, subassemblies, and systems worldwide. This stock has been under some notable selling pressure over the last six months, with shares moving to the downside by 23.8%.

If you take a glance at the chart for Triumph Group, you'll see that this stock has been downtrending badly over the last five months, with shares falling sharply off its high of $69.40 to its new 52-week low of $40.51 a share. During that downtrend, shares of Triumph Group have been consistently making lower highs and lower lows, which is bearish technical price action. That said, this stock has now started to rebound off that $40.51 low and shares of Triumph Group ripped higher on Thursday right off its 20-day moving average of $43.31 and back above its 50-day moving average of $45.51 a share with strong volume. That high-volume spike is now quickly pushing this stock 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 Triumph Group if it manages to break out above some near-term overhead resistance levels at $46 to $46.07 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 557,850 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 $49.30 to $50, or even $51 to $53.50 a share.

Traders can look to buy Triumph Group off weakness to anticipate that breakout and simply use a stop that sits right around Thursday's intraday low of $42.56 or near $41 a share. 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.

Cloud Peak Energy


My final breakout trading prospect is basic materials player Cloud Peak Energy  (CLD) , which produces coal in the Powder River Basin and the U.S. This stock has been hit hard by the sellers over the last six months, with shares off sharply by 48%.

If you look at the chart for Cloud Peak Energy, you'll notice that this stock has been attempting to carve out a major bottoming chart pattern over the last three months, with shares finding some buying interest each time it has pulled back to $2.40 to $2.60 a share. Shares of Cloud Peak Energy have now started to rip sharply higher right above those support levels and back above both its 20-day moving average of $3.05 a share and its 50-day moving average of $3.15 a share with strong upside volume flows. That high-volume spike is now quickly pushing this stock 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 Cloud Peak Energy if it manages to break out above some near-term overhead resistance levels at $3.28 to $3.50 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 2.15 million 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 just above $4 a share to $4.79, or even its 200-day moving average of $5.07 to $5.25 a share.

Traders can look to buy shares of Cloud Peak Energy off weakness to anticipate that breakout and simply use a stop that sits right below $3 a share or near more key support at $2.57 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 conformable percentage from your entry point.

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