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, it's free to find new buyers and momentum players which can ultimately push the stock significantly higher.

Breakout candidates are ones that I tweet about on a daily basis. These are also the exact type of stocks I love to trade.

I frequently flag high-probability setups, which are breakout plays and stocks that are acting technically bullish. These are the ones that often make monster moves to the upside. What's great about breakout trading is that you only focus on trends, price and volume. You don't have to concern yourself with anything else. The charts do all the talking.

Trading breakouts are 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, 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.

21Vianet Group

One technology player that's starting to trend within range of triggering a near-term breakout trade is 21Vianet Group (VNET) , which provides carrier-neutral Internet data center services to Internet companies, government entities, blue-chip enterprises, and small-to mid-sized enterprises in the People's Republic of China. This stock has been under heavy selling pressure over the last six months, with shares falling by 28.6%.

If you take a look at the chart for 21Viaent Group, you'll notice that this stock has been consolidating and trending sideways over the last two months, with shares moving between $6.83 a share on the downside and $7.58 a share on the upside. Shares of 21Vianet Group are now starting to bounce a bit right off its 20-day moving average of $7.22 a share, and it's also beginning to trend within range of triggering a breakout trade above the upper-end of its recent sideways trading chart pattern.

Traders should now look for long-biased trades in 21Vianet Group if it manages to break out above some near-term overhead resistance levels at $7.40 to $7.58 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 611,873 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 $8 to $8.50, or even $8.65 to $9.50 a share.

Traders can look to buy 21Vianet Group off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $7 or at $6.85 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.

NeoPhotonics

A semiconductor player that's starting to trend within range of triggering a near-term breakout trade in NeoPhotonics (NPTN) , which develops, manufactures, and sells hybrid photonic integrated optoelectronic products that transmit, receive, and switch high speed digital optical signals for communications networks. This stock has been hit by the sellers over the last six months, with shares trending off by 17.6%.

If you take a glance at the chart for NeoPhotonics, you'll notice that this stock has formed a triple bottom chart pattern over the last month and change, with shares finding some buying interest at $10.37, $10.53 and $10.63 a share. Following that potential bottom, shares of NeoPhotonics have now started to trend back above its 20-day moving average of $10.92 a share. That trend to the upside is now quickly pushing this stock within range of triggering a big breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trade in NeoPhotonics if it manages to break out above some near-term overhead resistance levels at $11.25 to its 50-day moving average of $11.37 a share and then above more key resistance levels at $11.39 to $11.55 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 781,760 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 200-day moving average of $12.45 a share to $12.86, or even $13 to $14 a share.

Traders can look to buy NeoPhotonics off weakness to anticipate that breakout and simply use a stop that sits right below those recent triple bottom support levels. 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.

Amplify Snack Brands

Another consumer goods player that's starting to trend within range of triggering a near-term breakout trade is Amplify Snack Brands (BETR) , which develops, markets, and distributes better-for-you snacking products in the U.S. and Canada. This stock has been smacked lower by the bears over the last six months, with shares falling by 26%.

If you take a glance at the chart of Amplify Snack Brands, you'll notice that this stock is starting to spike notably higher on Friday right off its 50-day moving average of $9.80 a share and right into its 20-day moving average of $10.34 a share. This jump to the upside is now starting to quickly push shares of Amplify Snacks Brands within range of triggering a near-term breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in Amplify Snack Brands if it manages to break out above some near-term overhead resistance levels at its 20-day moving average of $10.34 a share to $10.35 a share and then above more resistance at $10.50 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 920,405 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 $11 to $11.35 a share. Any high-volume move above $11.35 will then give this stock a chance to re-fill some of its previous gap-down-day zone from last November that started near $14 a share.

Traders can look to buy Amplify Snack Brands off weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support levels at $9.80 or at $9.50 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.

Coupa Software

Another technology player that's starting to spike within range of triggering a big breakout trade is Coupa Software (COUP) , which provides cloud-based spend management platform. This stock has been hit hard by the sellers over the last six months, with shares dropping sharply by 20.8%.

If you take a glance at the chart for Coupa Software you'll notice this stock has been uptrending a bit over the last month and change, with shares moving higher from its low of $23.52 a share to its intraday high on Friday of $26.80 a share. During that uptrend, this stock has been making mostly higher lows and higher highs, which is bullish technical price action. This uptrend has also started to push shares of Coupa Software back above both its 20-day moving average of $25.71 a share and its 50-day moving average of $25.79 a share.

Traders should now look for long-biased trades in Coupa Software if it manages to break out above some near-term overhead resistance levels at $27 to $27.53 a share and then above more resistance at $28.40 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 309,306 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 $31 to $33, or even $34 a share.

Traders can look to buy Coupa Software off weakness to anticipate that breakout and simply use a stop that sits right around some near-term support levels at $25.17 to $24.74 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 comfortable percentage from your entry point.

Alnylam Pharmaceuticals

My final breakout trading prospect is biotechnology player Alnylam Pharmaceuticals (ALNY) , which discovers, develops, and commercializes novel therapeutics based on RNA interference. This stock has been smoked by the bears over the last six months, with shares plunging by 37.4%.

If you look at the chart for Alnylam Pharmaceuticals, you'll notice that this stock has recently started to rip sharply higher right off its 50-day moving average of $41.01 a share with strong upside volume flows. This high-volume spike to the upside is now quickly pushing shares of Alnylam Pharmaceuticals within range of triggering a big breakout trade above some key overhead resistance levels. If this breakout hits soon, then it will push this stock back above the upper-end of its trading range that has held as resistance for the last three months.

Traders should now look for long-biased trades in Alnylam Pharmaceuticals if it manages to break out above some near-term overhead resistance levels at $46.54 to $47.50 a share and then above more key resistance at $48.44 a share with volume that registers near or above its three-month average action of 1.24 million shares. If that breakout materializes soon, then this stock will set up to re-test or possibly take out its next major overhead resistance level at $52.85 a share. Any high-volume move above $52.85 will then give this stock a chance to re-fill some of its previous gap-down-day zone from last October that started near $72 a share.

Traders can look to buy shares of Alnylam Pharmaceuticals off weakness to anticipate that breakout and simply use a stop that sits right around its 50-day moving average of $41.01 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.

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