Stock Quotes in this Article: AAPL, HNR, TSLA, YGE, SEAS

 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.

One example of a successful breakout trade I flagged recently was solar energy player Yingli Green Energy (YGE), which I featured in April 26's "5 Stocks Poised for Big Breakouts" at around $2.35 a share. I mentioned then that shares of YGE had been uptrending strong in April, with the stock printing higher lows and higher highs, which is bullish technical price action. That move was starting to push YGE within range of its 50-day moving average, and it was closing in on triggering a near-term breakout trade. That trade was set to trigger once YGE took out some near-term overhead resistance levels at $2.45 to $2.57 a share and then once it cleared more key resistance at $2.65 a share.

>>5 Stocks Under $10 Set to Soar

Guess what happened? Shares of YGE started to trigger that breakout during the next few trading session, but the stock failed and pulled back to its 200-day moving average at $2.14 a share. That pullback didn't last long, since YGE started to uptrend again and quickly went on to trigger that breakout trade with heavy upside volume. The stock exploded higher last week and hit a new 52-week high of $4.83 a share. That represents an eye-popping gain for anyone who followed the chart and pulled the trigger once YGE took out those key overhead resistance levels with strong upside volume.

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.

>>Warren Buffett's 5 Favorite Stocks for 2013

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.

>>5 Trades to Take as Stocks Soar in May

Tesla Motors

One stock that's within range of triggering a near-term breakout trade is Tesla Motors (TSLA), which designs, develops, manufactures and sells high-performance fully electric vehicles and advanced electric vehicle powertrain components. This stock has been on fire so far in 2013, with shares up 180%.

If you take a look at the chart for Tesla Motors, you'll notice that this stock recently pulled back off its all-time high of $97.12 a share to its recent low at just under $85 a share. That pullback came on much lighter volume than the upside volume we saw as shares of TSLA soared post-earnings from just under $65 to that $97.12 high. Shares of TSLA are now breaking out above some near-term overhead resistance at $95 a share and it's quickly moving within range of taking out its all-time high at $97.12 a share.

>>3 Big Stocks on Traders' Radars

Traders should now look for long-biased trades in TSLA if it manages to break out above some near-term overhead resistance levels at $96 to $97.12 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 5.71 million shares. If that breakout triggers soon, then TSLA will set up to enter new all-time high territory, which is bullish technical price action. Some possible upside targets off that breakout are $110 to $120 a share.

Traders can look to buy TSLA off any weakness to anticipate that breakout and simply use a stop that sits right below today's low of $92 a share. One could also buy TSLA off strength once it takes out those breakout levels with volume and then simply use a stop that sits right below $95 a share or a comfortable percentage point from your buy entry.

This current short interest as a percentage of the float for TSLA is extremely high at 37.3%. The bears do not want to see this stock make a new all-time high, since it will just add to any losses they already have. Look for a fast move and short-squeeze to develop if TSLA prints a new all-time high soon.

SeaWorld Entertainment

Another stock that looks poised to trigger a near-term breakout trade is SeaWorld Entertainment (SEAS), which owns and operates ten theme parks within the U.S. Some of its brands include SeaWorld, Busch Gardens and Shamu, among others. This company recently came public and the stock has been on a tear with shares up 14%.

If you take a look at the chart for SeaWorld Entertainment, you'll notice that this stock recently spiked lower to $34.62 a share following their first public earnings report. That spike was quickly bought up and the stock closed back above $37 a share. Shares of SEAS are now quickly approaching a near-term breakout trade above its all-time, which it hit a few weeks.

>>5 Stocks With Big Insider Buying

Market players should now look for long-biased trades in SEAS if it manages to break out above its all-time high at $39.65 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above 300,000 shares. If that breakout triggers soon, then SEAS will set up to enter new all-time high territory, which is bullish technical price action. Some possible upside targets off that breakout are $45 to $50 a share.

Traders can look to buy SEAS off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $37 a share. One could also buy SEAS off strength once it takes out its all-time high at $39.65 a share with volume and then simply use a stop that sits a comfortable percentage point from your buy entry.

Harvest Natural Resources

Another name that's quickly moving within range of triggering a major breakout trade is Harvest Natural Resources (HNR), an energy company engaged in the acquisition, exploration, development, production and disposition of oil and natural gas properties. This stock has been hit hard by the sellers so far in 2013, with shares off by 65%.

>>4 Hot Stocks to Trade (or Not)

If you look at the chart for Harvest Natural Resources, you'll notice that this stock has been trending sideways inside of a consolidation pattern for the last two months and change, with shares moving between $2.45 on the downside and $3.96 on the upside. Shares of HNR are now starting to move within range of triggering a major breakout trade above the upper-end of its sideways chart pattern.

Market players should now look for long-biased trades in HNR if it manages to break out above some near-term overhead resistance levels at $3.13 a share to its 50-day moving average at $3.37 a share and then once it takes out more resistance levels at $3.63 to $3.96 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 o 654,771 shares. If that breakout hits soon, then HNR will set up to re-fill some of its previous gap down zone from March that started near $5.50 a share.

Traders can look to buy HNR off any weakness to anticipate that breakout and simply use a stop that sits right below some near-term support levels at $2.90 to $2.88 a share, or even near $2.45 a share if you want to give it more room. One can also buy HNR off strength once it clears those first tier breakout levels with volume and then simply use a stop right below $2.90 to $2.88 a share. I would add to either position once HNR takes out $3.63 to $3.96 a share with strong upside volume.

This stock is a favorite target of the short-sellers, since the current short interest as a percentage of the float for HNR is very high at 14.1%. If that breakout triggers soon, then we could easily see a large short-squeeze develop for shares of HNR, so make sure to have this name on your breakout trading radar.

Apple

Another stock that's starting to trend within range of triggering a near-term breakout trade is Apple (AAPL), which designs, manufactures and markets personal computers, mobile communication devices, media devices and portable digital music and video players and sells a variety of related software, services, peripherals and networking solutions. This stock has struggled so far in 2013, with shares off by 16.4%.

>>4 Tech Stocks Under $10 Spiking Higher

If you look at the chart for Apple, you'll notice that this stock recently spiked back above its 50-day moving average of $434 a share, after pulling back from its recent high of $463 a share. Shares of AAPL have now been trending sideways and consolidating right above its 50-day moving average. That move now has AAPL quickly moving within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in AAPL if it manages to break out above some near-term overhead resistance at $448.35 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 volume of 16.80 million shares. If that breakout triggers soon, then AAPL will set up to re-test or possibly take out its next major overhead resistance levels at $463 to $466.86 a share. Any high-volume move above those levels will then put $481.75 a share into range for shares of AAPL.

Traders can look to buy AAPL off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day at $434 a share. One can also buy AAPL off strength once it takes out $448.35 a share with volume and then simply use a stop that sits a comfortable percentage point from your buy entry. I would add to either position if AAPL clears $463 to $466.86 a share with heavy upside volume.

TravelCenters of America

My final breakout idea today is TravelCenters of America (TA), which operates and franchises travel centers mainly along the U.S. interstate highway system. This stock has been on fire so far in 2013, with shares up a whopping 134%.

If you look at the chart for TravelCenters of America, you'll notice that this stock recently pulled back off its 52-week high of $12.50 a share to its recent low of $10.59 a share. That pullback came after a powerful uptrend for shares of TA that took the stock from $4 to that $12.50 in six months. So far, shares of TA have held its 50-day moving average at $10.47 a share off this recent pullback. Now the stock is starting to push higher and move within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in TA if it manages to break out above some near-term overhead resistance levels at $11.48 to $12.03 a share and then once it takes out its 52-week high at $12.50 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 446,248 shares. If that breakout triggers soon, then TA will set up to enter new 52-week-high territory above $12.50, which is bullish technical price action. Some possible upside targets off that breakout are $14 to $15 a share, or even $16 a share.

Traders can look to buy TA off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day at $10.47 a share or right below some more support at $10.31 a share. One could also buy TA off strength once it clears those breakout levels with volume and then simply use a stop right below its 50-day at $10.47 a share.

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

-- Written by Roberto Pedone in Madison, Wis.

RELATED LINKS:

>>5 Big Stocks That Could Drop in May
>>5 Dividend Stocks Getting Ready to Hike Payouts

>>How to Use a Stock Screener to Scan for Hot Stocks

Follow Stockpickr on Twitter and become a fan on Facebook.

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.