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.

Q2 Holdings

One stock that's starting to trend within range of triggering a near-term breakout trade is Q2 Holdings (QTWO) , which provides secure cloud-based virtual banking solutions to regional and community financial institutions. This stock has been hit by the sellers over the last six months, with shares off sharply by 27.4%.

If you take a look at the chart for Q2 Holdings, you'll notice that this stock jumped notably higher on Thursday right off its 20-day moving average of $20.44 a share with above-average volume. Volume for that trading session registered over 253,000 shares, which is above its three-month average volume of 200,249 shares. This high-volume spike to the upside is now quickly pushing shares of Q2 Holdings within range of triggering a near-term breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in Q2 Holdings if it manages to break out above its 50-day moving average of $21.60 a share and then above more key resistance levels at $22.19 to $22.32 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 200,249 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 $23.33 to $24, or even its 200-day moving average of $25.49 to $26 a share.

Traders can look to buy Q2 Holdings off weakness to anticipate that breakout and simply use a stop that sits right below some near-term support levels at $20.41 a share or at $20.08 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.

Fitbit

A technology player that's starting to trend within range of triggering a big breakout trade is Fitbit (FIT) , which provides wearable health and fitness tracking devices. This stock has been smashed lower by the bears over the last six months, with shares plunging lower by 60.5%.

If you take a glance at the chart for Fitbit, you'll notice that this stock has been uptrending a bit over the last few weeks, with shares moving higher off its new 52-week low of $11.91 a share to its recent high of $13.85 a share with a number of strong upside volume days. During this uptrend, shares of Fitbit have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed 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 trade in Fitbit if it manages to break out above its 20-day moving average of $13.61 a share and then once it clears more key resistance levels at $13.85 to its gap-down-day high from February at $14.30 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 8.28 million shares. If that breakout develops soon, then this stock will set up to re-fill some of its previous gap-down-day zone that started at $16.75 a share.

Traders can look to buy Fitbit off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $12.52 to $12.26 a share. One could 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.

MyoKardia

Another clinical stage biopharmaceutical player that's starting to move within range of triggering a near-term breakout trade is MyoKardia (MYOK) , which focuses on discovering, developing and commercializing therapies for the treatment of serious and neglected rare cardiovascular diseases. This stock has been smacked hard by the sellers over the last three months, with shares moving sharply lower by 39.1%.

If you take a glance at the chart for MyoKardia, you'll notice that this stock has been uptrending a bit over the last month, with shares moving higher off its new 52-week low of $6.24 a share to its recent high of $8.25 a share. During that uptrend, shares of MyoKardia have been making mostly higher lows and higher highs, which is bullish technical price action. This uptrend is coming after a massive downtrend in the previous few months, which saw the stock plunge lower off its high of $16.76 to that new low $6.24 a share. Shares of MyoKardia are now starting 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 MyoKardia if it manages to break out above Thursday's intraday high of $7.85 a share to some more near-term overhead resistance at $8.25 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 98,861 shares. If that breakout kicks 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 $9.39 to $9.48, or even possibly its recent high of $11.45 a share.

Traders can look to buy MyoKardia off weakness to anticipate that breakout and simply use a stop that sits right around some near-term support levels at $7.14 to $6.80 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.

AtriCure

Another medical device player that's starting to trend within range of triggering a big breakout trade is AtriCure (ATRC) , which provides atrial fibrillation solutions worldwide. This stock has trended down sharply over the last six months, with shares off by 28%.

If you take a glance at the chart for AtriCure, you'll notice that this stock has been uptrending over the last few weeks, with shares moving higher off its new 52-week low of $14.85 a share to its intraday high on Thursday of $17.90 a share. During that uptrend, shares of AtriCure have been consistently making higher lows and higher highs, which is bullish technical price action. This stock spiked notably higher on Thursday right off its 20-day moving average of $16.84 a share with monster upside volume flows. Volume for that trading session registered over 1.4 million shares, which is well above its three-month average action 197,757 shares. This high-volume spike to the upside is now quickly pushing shares of AtriCure within range of triggering a big breakout trade.

Traders should now look for long-biased trades in AtriCure if it manages to break out above its 50-day moving average of $18.02 a share to some more key resistance levels at $18.08 to $19 a share and then above $19.50 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 197,757 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 200-day moving average of $21.68 to $23, or even $25 a share.

Traders can look to buy AtriCure off weakness to anticipate that breakout and simply use a stop that sits right below its 20-day moving average of $16.84 a share or around more near-term support at $16 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.

ResMed

My final breakout trading prospect is healthcare player ResMed (RMD) , which develops, manufactures, distributes and markets medical equipment for the diagnosis, treatment and management of respiratory disorders with a focus on sleep-disordered breathing. This stock has been in favor with the bulls over the last six months, with shares moving higher by 15.9%.

If you look at the chart for ResMed, you'll notice that this stock trended notably higher on Thursday right off its 20-day moving average of $58.06 a share with strong upside volume flows. Volume for that trading session registered over 1.78 million shares, which is well above its three-month average action of 1.27 million shares. This high-volume jump to the upside is now starting to push shares of ResMed 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 ResMed if it manages to break out above some key near-term overhead resistance levels at $59.87 to $60.03 a share with volume that hits near or above its three-month average action of 1.27 million shares. If that breakout fires off soon, then this stock will set up to re-fill some of its previous gap-down-day zone from last May that started near $64 a share. If that gap gets filled with volume, then shares of Res Med could make a run at another big gap-down-day zone from last April that started near $72 a share.

Traders can look to buy shares of ResMed off weakness to anticipate that breakout and simply use a stop that sits right below either its 50-day moving average of $56.16 a share or its 200-day moving average of $55.24 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 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.

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