Stock Quotes in this Article: ACOR, MED, OPXA, TTWO, SPWR

 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.

An example of a successful recent breakout trade is TearLabs (TEAR), which I featured in May 23's "5 Stocks Under $10 Set to Soar" at around $10 a share. I mentioned then that shares of TEAR had been in a beautiful uptrend for the last five months, with the stock soaring higher from its low of $3.71 to a recent high of $10.25 a share. That uptrend was quickly pushing shares of TEAR within range of triggering a major breakout trade above its 52-week high at $10.25 a share.

>>5 Stocks Under $10 Set to Soar

Guess what happened? Shares of TEAR triggered that breakout on May 28, and the stock hit an intraday high of $10.73 a share. This stock briefly pulled back after breaking out to $9.58 a share, but that pullback never violated some key near-term support levels I highlighted in my article. Then TEAR resumed its uptrend again and broke out on June 3 with monster upside volume. This stock went on to hit a recent high of $12.97 a share, which represents a big gain of well over 20% for anyone who entered this trade.

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.

>>5 Stocks Insiders Love Right Now

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.

>>Beat the S&P With 5 Stocks Everyone Else Hates

Opexa Therapeutics

One stock that's trending within range of triggering a major breakout trade is Opexa Therapeutics (OPXA), which is engaged in developing personalized cellular therapies with the potential to treat major illnesses, including multiple sclerosis. This stock has been in play with the bulls in 2013, with shares up 63%.

>>3 Health Care Stocks Under $10 to Watch

If you take a look at the chart for Opexa Therapeutics, you'll notice that this stock is just starting to spike sharply higher today back above its 50-day moving average at $1.81 a share with above-average volume. Volume so far today has already registered over 430,000 shares, which is well above its three-month average action of 376,325 shares. This move is starting to push shares of OPXA within range of triggering a major breakout trade.

Traders should now look for long-biased trades in OPXA if it manages to break out above some near-term overhead resistance levels at $1.92 to its 200-day moving average at $2.04 a share and then once it clears some more key resistance at $2.25 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 376,325 shares. If that breakout triggers soon, then OPXA will set up to re-test or possibly take out its next major overhead resistance level at $2.82 a share. Any high-volume move above $2.82 will then give OPXA a chance to trend well north of $3 a share.

Traders can look to buy OPXA off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $1.65 to $1.54 a share. One could also buy OPXA off strength once it takes out those breakout levels with volume and then simply use a stop that sits right below its 50-day moving average at $1.81 a share, or below $1.65 a share.

This stock is a favorite target of the short-sellers, since the current short interest as a percentage of the float for OPXA is very high at 10.4%. This stock has some serious short-squeeze potential if that breakout triggers soon, so make sure to keep this name on your trading radar.

Acorda Therapeutics

Another stock that looks ready to trigger a near-term breakout trade is Acorda Therapeutics (ACOR), which is engaged in the identification, development and commercialization of novel therapies that improve neurological function in people with multiple sclerosis, spinal cord injury and disorders of the central nervous system. This stock is off to a hot start in 2013, with shares up 36%.

>>3 Big Stocks on Traders' Radars

If you take a look at the chart for Acorda Therapeutics, you'll notice that this stock has been uptrending modestly for the last few weeks, with shares moving higher from its low of $31.26 to its intraday high of $34.55 a share. During that uptrend, shares of ACOR have been mostly making higher lows and higher highs, which is bullish technical price action. That move is quickly pushing shares of ACOR within range of triggering a near-term breakout trade.

Market players should now look for long-biased trades in ACOR if it manages to break out above some near-term overhead resistance levels at $34.19 to $35 a share 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 450,589 shares. If that breakout triggers soon, then ACOR will set up to re-test or possibly take out its next major overhead resistance levels at $37 to $39 a share.

Traders can look to buy ACOR off any weakness to anticipate that breakout and simply use a stop that sits right below $33 to $32.50 a share. One could also buy ACOR 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.

Take-Two Interactive Software

One name that's quickly moving within range of triggering a major breakout trade is Take-Two Interactive Software (TTWO), a developer, marketer and publisher of interactive entertainment for consumers around the globe. This stock is off to a strong start in 2013, with shares up sharply higher by 52%.

>>3 Tech Stocks Under $10 to Watch

If you look at the chart for Take-Two Interactive Software, you'll notice that this stock recently pulled back twice right to its 50-day moving average and found buying interest. That action could be marking a near-term bottom for TTWO from where the stock can launch from. Shares of TTWO are now ripping higher today and quickly moving within range of triggering a major breakout trade.

Market players should now look for long-biased trades in TTWO if it manages to break out above some near-term overhead resistance levels at $16.96 to its 52-week high at $17.54 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 1.57 million shares. If that breakout hits soon, then TTWO will set up to enter new 52-week high territory, which is bullish technical price action. Some possible upside targets off that breakout are $20 to $25 a share.

Traders can look to buy TTWO off any weakness to anticipate that breakout and simply use a stop that sits right below some near-term support levels at $15.75 to $15.56 a share. One can also buy TTWO 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 very popular among the bears, since the current short interest as a percentage of the float for TTWO is very high at 15.1%. If that breakout triggers in the near future, then we could easily see a monster short-squeeze develop for shares of TTWO, so make sure keep a close eye on this stock.

SunPower

Another stock that's starting to move within range of triggering a near-term breakout trade is SunPower (SPWR), a vertically integrated solar products and services company that designs, manufactures and delivers high-performance solar electric systems worldwide for residential, commercial and utility-scale power plant customers. This stock has made an insane move higher so far in 2013, with shares up a whopping 247%.

>>4 Hot Stocks to Trade (or Not)

If you look at the chart for SunPower, you'll notice that this stock recently pulled back of its 52-week high of $23.76 a share and found some buying interest at around $18 a share. This stock has actually put in a triple bottom at $18.05, $18 to $17.77 a share over the last few weeks. If that bottom holds, which it has so far, then SPWR could be ready to triggering a near-term breakout trade.

Traders should now look for long-biased trades in SPWR if it manages to break out above some near-term overhead resistance levels at $19.67 to $20.90 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 volume of 5.79 million shares. If that breakout triggers soon, then SPWR will set up to re-test or possibly take out its 52-week high at $23.76 a share. Any high-volume move above that level will then put $25 to $30 into range for shares of SPWR.

Traders can look to buy SPWR off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $18 to $17.77 a share. One can also buy SPWR 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. I would add to either position once SPWR takes out its 52-week high at $23.76 a share with high volume.

This stock is loved among the short-sellers, since the current short interest as a percentage of the float for SPWR is extremely higher at 29.7%. That high of a short interest could easily produce an explosive move if SPWR triggers that breakout soon, so make sure to have this name on your breakout trading watchlist.

Medifast

My final breakout trading idea is Medifast (MED), which is engaged in the production, distribution and sale of weight management and disease management products and other consumable health and diet products. This stock has performed decent so far in 2013, with shares up 10%.

>>5 Stocks Set to Soar on Bullish Earnings

If you look at the chart for Medifast, you'll notice that this stock has been uptrending very strong for the last three months, with shares soaring higher from its low of $21.75 to its recent high of $29.47 a share. During that uptrend, shares of MED have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of MED within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in MED if it manages to break out above some near-term overhead resistance levels at $29.47 to $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 212,580 shares. If that breakout triggers soon, then MED will set up to re-test or possibly take out its 52-week high at $33.29 a share. Any high-volume move above its 52-week high could then put $35 to $40 into range for shares of MED.

Traders can look to buy MED off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $28 to $27 a share. One could also buy MED off strength once it clears those breakout levels with volume and then simply use a stop that sits a conformable percentage from your entry point.

This is another popular stock among the bears, since the current short interest as a percentage of the float for MED is pretty high at 12.2%. This is another name with short-squeeze potential off the breakout, so make sure to keep this name on your 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.

RELATED LINKS:

>>Sneak Peek: 5 Dividend Hikes on the Horizon
>>Stocks Are in Make-or-Break Mode: 5 Must-See Charts

>>Why Fannie Got Spanked

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.