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.

Fate Therapeutics

One clinical-stage biopharmaceutical player that's starting to spike within range of triggering a major breakout trade is Fate Therapeutics  (FATE - Get Report) , which discovers and develops programmed cellular therapeutics for the treatment of severe, life-threatening diseases. This stock has been destroyed by the bears over the last six months, with shares down big by 68.8%.

If you take a look at the chart for Fate Therapeutics, you'll notice that this stock ripped sharply higher on Thursday right off its 20-day moving average of $1.70 a share with above-average volume. Volume for that trading session registered over 304,000 shares, which is just above its three-month average volume of 293,492 shares. This high-volume jump to the upside is now quickly pushing shares of Fate Therapeutics within range of triggering a major breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in Fate Therapeutics if it manages to break out above some key near-term overhead resistance levels at $1.86 to $1.87 a share and then above more resistance at $1.92 to around $2 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 293,492 shares. If that breakout develops soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $2.21 to its 50-day moving average of $2.36, or even $3 a share.

Traders can look to buy Fate Therapeutics off weakness to anticipate that breakout and simply use a stop that sits right below some near-term support levels at $1.55 to its new 52-week low of $1.46 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.

ProNAi Therapeutics

A clinical-stage oncology player that's starting to spike within range of triggering a big breakout trade is ProNAi Therapeutics  (DNAI) , which develops and commercializes a class of therapeutics based on its DNA interference technology platform for patients with cancer and hematological diseases. This stock has been annihilated by the bears over the last six months, with shares dropping sharply lower by 79.5%.

If you take a glance at the chart for ProNAi Therapeutics, you'll notice that this stock recently formed a double bottom chart pattern, after shares found some buying interest at $5.85 to $5.70 a share. Following that potential bottom, shares of ProNAi Therapeutics have now started to spike sharply higher, and it's quickly trending within range of triggering a big breakout trade above some near-term overhead resistance levels.

Traders should now look for long-biased trade in ProNAi Therapeutics if it manages to break out above its 20-day moving average of $6.57 a share and then above more key resistance levels at $6.62 to around $7 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 143,485 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 $7.46 to $8.60, or even $9 to its 50-day moving average of $9.53 a share.

Traders can look to buy ProNAi Therapeutics off weakness to anticipate that breakout and simply use a stop that sits right around its new 52-week low of $5.70 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.

Catabasis Pharmaceuticals

Another clinical-stage biopharmaceutical player that's starting to move within range of triggering a near-term breakout trade is Catabasis Pharmaceuticals  (CATB) , which focuses on the discovery, development and commercialization of therapeutics to treat inflammatory and metabolic diseases. This stock has been hit hard by the sellers over the last six months, with shares plunging sharply lower by 60.9%.

If you take a glance at the chart for Catabasis Pharmaceuticals, you'll notice that this stock has been downtrending badly over the last three months, with shares collapsing lower off its high of $10.83 a share to its new 52-week low of $3.90 a share. During that downtrend, this stock has been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of Catabasis Pharmaceuticals have now started to spike higher off that $3.90 low with volume, and it's quickly trending within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in Catabasis Pharmaceuticals if it manages to break out above its 20-day moving average of $4.66 a share and then above more key near-term overhead resistance levels at $4.71 to $5 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 34,975 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 $5.50 to its 50-day moving average of $6.16, or even $6.31 to $6.86 a share.

Traders can look to buy Catabasis Pharmaceuticals off weakness to anticipate that breakout and simply use a stop that sits right around its new 52-week low of $3.90 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.

Apple

Another technology player that's starting to trend within range of triggering a near-term breakout trade is Apple  (AAPL - Get Report) . This stock has trended a bit lower over the last three months, with shares off by 11.8%.

If you take a glance at the chart for Apple, you'll notice that this stock has been uptrending over the last few weeks, with shares moving higher off its low of $93.32 a share to its intraday high on Thursday of $101.71 a share. During that uptrend, shares of Apple have been consistently making higher lows and higher highs, which is bullish technical price action. This uptrend has now pushed shares of Apple back above both its 20-day moving average and its 50-day moving average, and it's quickly pushing the stock within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in Apple if it manages to break out above some near-term overhead resistance at $102 a share with high volume. Look for a sustained move or close above that level with volume that registers near or above its three-month average action of 49.42 million 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 $108 to $112, or even its 200-day moving average of $112.83 to around $119 a share.

Traders can look to buy Apple off weakness to anticipate that breakout and simply use a stop that sits right around its 50-day moving average of $98.62 a share or near its 20-day moving average of $96.52 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.

From a fundamental perspective, Apple is a holding in Jim Cramer's Action Alerts PLUS charitable portfolio. "Investors should focus on the abundance of catalysts that will ultimately power shares," Cramer and co-portfolio-manager Jack Mohr wrote recently. "As we always say, Apple is one to own, not trade (especially with all the noise out there now)."

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Intercept Pharmaceuticals

My final breakout trading prospect is development stage pharmaceutical player Intercept Pharmaceuticals  (ICPT - Get Report) , which focuses on the discovery, development and commercialization of novel therapeutics to treat chronic liver and intestinal diseases utilizing its proprietary bile acid chemistry. This stock has been smacked lower by the bears over the last six months, with shares off sharply by 32.9%.

If you look at the chart for Intercept Pharmaceuticals, you'll notice that this stock ripped notably higher on Thursday back above its 50-day moving average of $122.25 a share with lighter-than-average volume. This move is now quickly pushing shares of Intercept Pharmaceuticals within range of triggering a big breakout trade above a key downtrend line that dates back to early January.

Traders should now look for long-biased trades in Intercept Pharmaceuticals if it manages to break out above a key downtrend line that will trigger over some near-term resistance levels at $125.95 to $131.10 a share with volume that hits near or above its three-month average action of 713,657 shares. If that breakout develops soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $140 to $152.60, or even $163 to $175 a share.

Traders can look to buy shares of Intercept Pharmaceuticals off weakness to anticipate that breakout and simply use a stop that sits just below Thursday's intraday low of $117.92 or around more key support at $110.92 a share. One can 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 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.