Stock Quotes in this Article: ARUN, HLF, MAKO, RVBD, LOCK

MADISON, 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 that 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.

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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 trade higher from current levels.

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Riverbed Technology

One name that's trending within range of triggering a major breakout trade is Riverbed Technology (RVBD), which has developed innovative and comprehensive solutions to the fundamental problems associated with IT performance across wide area networks. This stock has been under pressure so far in 2013, with shares off by 16%.

If you take a look at the chart for Riverbed Technology, you'll notice that this stock has been uptrending for the last few weeks, with shares moving higher from its low of $14.83 to its intraday high of $16.56 a share. During that uptrend, shares of RVBD have been mostly making higher lows and higher highs, which is bullish technical price action. That move is quickly pushing shares of RVBD within range of triggering a major breakout trade.

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Traders should now look for long-biased trades in RVBD if it manages to break out above some key overhead resistance levels at $16.40 to $17.50 a share and then once it clears its 200-day moving average at $18.04 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 3.31 million shares. If that breakout triggers soon, then RVBD will set up to re-fill some of its previous gap down zone from February that started near $20.50 a share.

Traders can look to buy RVBD off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day at $15.26 a share. One could also buy RVBD off strength once it takes out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Mako Surgical

Another stock that looks ready to trigger a potential breakout trade is Mako Surgical (MAKO), a medical device company that markets its advanced robotic arm solution, joint specific applications for the knee and hip, and orthopedic implants for orthopedic procedures. This stock is off to a slow start in 2013, with shares up just 3.8% during the last three months.

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This company was hit with some bullish news this morning, after Piper Jaffray said clinical data presented this week validates the benefits of MAKO Surgical's knee and hip applications and implants. The company reiterated its overweight rating on the stock with a $23 price target.

If you take a look at the chart for MAKO Surgical, you'll notice that this stock has been uptrending strong for the last two months and change, with shares moving higher from its low of $10 to its intraday high of $13.28 a share. During that uptrend, shares of MAKO have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of MAKO within range of triggering a possible breakout trade.

Market players should now look for long-biased trades in MAKO if it manages to break out above some key overhead resistance levels at $13.45 to $14.18 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 939,553 shares. If that breakout triggers soon, then MAKO will set up to re-test or possibly take out its next major overhead resistance levels at $16.28 to $19 a share.

Traders can look to buy MAKO off any weakness to anticipate that breakout and simply use a stop that sits right below some near-term support at $12 a share. One could also buy MAKO off strength once it takes out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

This stock is a favorite target of the short-sellers, since the current short interest as a percentage of the float for MAKO is very high at 28.3%. With a short interest this high, shares of MAKO have the potential for a large move if that breakout triggers soon, so make sure to keep this name on watch.

LifeLock

One name that's quickly moving within range of triggering a near-term breakout trade is LifeLock (LOCK), a provider of proactive identity theft protection services for consumers and identity risk assessment and fraud protection services for enterprises. This stock has been on fire so far in 2013, with shares up sharply by 33%.

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If you look at the chart for LifeLock, you'll notice that this stock has been uptrending strong for the last two months and change, with shares soaring higher from its low of $8.31 to its intraday high of $10.96 a share. During that uptrend, shares of LOCK have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of LOCK within range of triggering a near-term breakout trade.

Market players should now look for long-biased trades in LOCK if it manages to break out above some near-term overhead resistance at around $11 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 648,431 shares. If that breakout hits soon, then LOCK will set up to re-test or possibly take out its all-time high at $12.49 a share.

Traders can look to buy LOCK off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average at $9.78 a share. One can also buy LOCK off strength once it clears $11 a share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

This is another equity that is popular among the short-sellers, since the current short interest as a percentage of the float for LOCK is pretty high at 9.1%. If LOCK triggers that breakout soon, then we could easily see a sharp short-covering rally take hold. Keep in mind those short-sellers hate being short a stock that makes a new all-time high, since there's no resistance left to stand in its way to higher prices.

Aruba Networks

Another stock that's starting to trend within range of triggering a major breakout trade is Aruba Networks (ARUN), which provides enterprise mobility solutions that enables secure access to data, voice and video applications across wireless and wireline enterprise networks. This stock has been hit hard by the sellers so far in 2013, with shares off by 29%.

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If you look at the chart for Aruba Networks, you'll notice that this stock has just started to bounce higher off some near-term support at $13.91 a share. This bounce is coming after shares of ARUN spiked sharply higher during the last month from $12.38 to $15.64 a share and then pulled back to that $13.91 low. This bounce is starting to push shares of ARUN within range of triggering a major breakout trade.

Traders should now look for long-biased trades in ARUN if it manages to break out above some near-term overhead resistance levels at $15.02 to $15.64 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 4.10 million shares. If that breakout triggers soon, then ARUN will set up to re-fill some of its recent gap down zone from May that started at $18.10 a share. Any high-volume move above $18.10 and its 50-day at $18.28 will then give ARUN a chance to re-fill another recent gap down zone that started near $22 a share.

Traders can look to buy ARUN off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $13.91 a share, or around $13 a share. One can also buy ARUN off strength once it takes out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

This is yet another name that the bears love, since the current short interest as a percentage of the float for ARUN is very high at 12.2%. If that breakout triggers soon, then we could see a fast move into that gap as the bears rush to cover some of their positions.

Herbalife

My final breakout play today is Herbalife (HLF), a global nutrition company that sells weight management, healthy meals and snacks, sports and fitness, energy and targeted nutritional products as well as personal care products. This stock has been red hot so far in 2013, with shares up sharply by 48%.

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If you look at the chart for Herbalife, you'll notice that this stock has been rallying hard since it tested its 50-day and 200-day moving averages over the last few weeks. That strong push higher now has shares of HLF trending within range of triggering a major breakout trade above a key longer-term descending trendline.

Traders should now look for long-biased trades in HLF if it manages to break out above some key overhead resistance levels at $52.84 to $53.60 a share and then once it clears more past resistance at $56.39 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 2.40 million shares. If that breakout triggers soon, then HLF will set up for a potential monster run higher back towards its next significant overhead resistance level at $73 a share.

Traders can look to buy HLF off any weakness to anticipate that breakout and simply use a stop that sits right below some near-term support at $45 a share, or around $42.09 a share. One can also buy HLF off strength once it clears those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

This stock is absolutely loved by the bears, since the current short interest as a percentage of the float for HLF is extremely high at 30.7%. This stock could easily experience a monster short-squeeze if that breakout triggers soon, so make sure to put this name on your breakout trading radar.

To see more breakout candidates, check out the Breakout Stocks of the Week portfolio on Stockpickr.

-- Written by Roberto Pedone in Madison, Wis.

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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Madison, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.