Stock Quotes in this Article: EZCH, IRWD, OPTR, QCOR, RKUS

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

>>5 Stocks Under $10 Set to Soar

One example of a successful breakout trade I flagged recently was solar power player SunPower (SPWR), which I featured in June 7's "5 Stocks Poised for Breakouts" at around $19.60 a share. I mentioned in that piece that shares of SPWR were forming a major bottoming chart pattern at around $18 a share and just under that level. I said that if SPWR was able to hold just below $18, then this stock looked ready to reverse its recent downtrend and potentially trigger a near-term breakout trade above $19.67 to $20.90 a share.

Guess what happened? Shares of SPWR pulled back to just under $18 a share at $17.52 a share, and that pullback never violated its key technical level at its 50-day moving average. After hitting $17.52, shares of SPWR have done nothing but uptrend and triggering that breakout trade I highlighted. This stock has hit a new 52-week high today at $26.80 a share, which represents a gain of over 30% from that $19.60 level had you bought into strength, or a gain of around 50% from the $18 level had you bought the stock into weakness. Either way, anyone who loaded up on SPWR ahead of the breakout has banked some serious in coin during the last month.

>>5 Charts to Trade Right Now

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.

>>5 Dow Dividend Stocks to Beat the S&P

With that in mind, here's a look at five stocks that are setting up to break out and trade higher from current levels.

Optimer Pharmaceuticals

One name that's starting to trend within range of triggering a major breakout trade is Optimer Pharmaceuticals (OPTR), a biopharmaceutical company engaged in the development and commercialization of pharmaceutical products in the U.S. and Canada. This stock has been on fire so far in 2013, with shares up sharply by 72%.

If you take a look at the chart for Optimer Pharmaceuticals, you'll notice that this stock has been uptrending strong for the last few weeks, with shares trending higher from its low of $12.86 to its intraday high of $15.73 a share. During that uptrend, shares of OPTR have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of OPTR within range of triggering a major breakout trade.

>>3 Big Stocks on Traders' Radars

Traders should now look for long-biased trades in OPTR if it manages to break out above some near-term overhead resistance levels at $16 to its 52-week high at $16.80 a share and then once it takes out its three-year high at $17.95 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 volume of 904,125 shares. If that breakout triggers soon, then OPTR will set up to enter new 52-week- and three-year-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 OPTR off any weakness to anticipate that breakout and simply use a stop that sits somewhere just below its 50-day at $14.65 a share. One could also buy OPTR 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.

Questcor Pharmaceuticals

Another stock that looks poised to trigger a near-term breakout trade is Questcor Pharmaceuticals (QCOR), a biopharmaceutical company that provides prescription drugs for the treatment of multiple sclerosis, nephrotic syndrome and infantile spasms indications. This stock has been in play with the bulls so far in 2013, with shares up big by 84%.

If you take a look at the chart for Questcor Pharmaceuticals, you'll notice that this stock has been uptrending strong for the last month, with shares soaring higher from its low of $42.01 to its intraday high of $49.71 a share. During that uptrend, shares of QCOR have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of QCOR within range of triggering a near-term breakout trade.

>>5 Summer Buy Signals From the Health Care Sector

Market players should now look for long-biased trades in QCOR if it manages to break out above some near-term overhead resistance at $50.20 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 1.98 million shares. If that breakout triggers soon, then QCOR will set up to re-test or possibly take out its three-year high at $57.53 a share. Any high-volume move above that level will then give QCOR a chance to trend well north of $60 a share.

Traders can look to buy QCOR off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $46 a share. One could also buy QCOR off strength once it takes out $50.20 a share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

EZChip Semiconductor

One name that's quickly moving within range of triggering a major breakout trade is EZChip Semiconductor (EZCH), a fabless semiconductor company engaged in the development and marketing of Ethernet network processors for networking equipment. This stock has been under pressure from the sellers in 2013, with shares off by 14%.

If you look at the chart for EZChip Semiconductor, you'll notice that this stock has just started to bounce right off its 50-day moving average at $26.90 a share. That bounce is quickly pushing shares of EZCH within range of triggering a major breakout trade.

>>3 Tech Stocks Spiking on Big Volume

Market players should now look for long-biased trades in EZCH if it manages to break out above its 200-day moving average of $29.39 a share and then above more near-term resistance at $29.53 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 206,308 shares. If that breakout triggers soon, then EZCH will set up to re-test or possibly take out its next major overhead resistance levels at $35 to $35.65 a share, or even $38 a share.

Traders can look to buy EZCH off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $26.90 a share, or below more key support at $26.36 a share. One can also buy EZCH 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.

Ironwood Pharmaceuticals

Another stock that's starting to push within range of triggering a near-term breakout trade is Ironwood Pharmaceuticals (IRWD), an entrepreneurial pharmaceutical company that discovers, develops and intends to commercialize differentiated medicines that improve patients' lives. This stock has been hammered by the bears over the last three months, with shares plunging by 40%.

>>4 Big Under-$10 Stocks Making Big Moves

If you look at the chart for Ironwood Pharmaceuticals, you'll notice that this stock has been downtrending badly for the last four months, with shares plunging from its high of $19.67 to its recent low of $9.83 a share. During that downtrend, shares of IRWD have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of IRWD have started to bounce off that $9.83 low and it's now quickly moving within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in IRWD if it manages to break out above some near-term overhead resistance levels at $10.81 to $11 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 volume of 1.28 million shares. If that breakout triggers soon, then IRWD will set up for a powerful bounce higher and possible reversal of its recent downtrend. Some possible upside targets off that breakout are $13.50 to $14 a share, or even $16 a share.

Traders can look to buy IRWD off any weakness to anticipate that breakout and simply use a stop that sits right below its recent low of $9.83 a share. One can also buy IRWD 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.

Ruckus Wireless

My final breakout trading idea today is Ruckus Wireless (RKUS), which provides carrier-class Wi-Fi solutions to service providers and enterprises to solve network capacity and coverage challenges. This stock has been destroyed by the bears so far in 2013, with shares down by 39%.

>>5 Hate Earnings Stocks That You Should Love

If you look at the chart for Ruckus Wireless, you'll notice that this stock has been uptrending strong for the last month, with shares soaring higher from its low of $10.24 to its recent high of $13.74 a share. During that uptrend, shares of RKUS have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of RKUS within range of triggering a major breakout trade.

Traders should now look for long-biased trades in RKUS if it manages to break out above some near-term overhead resistance levels at $13.74 to its gap down day high of $15.40 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 1.27 million shares. If that breakout triggers soon, then RKUS will set up to re-fill some of its previous gap down zone from May that started at $19 a share. Any high-volume move above $19 a share could then take RKUS back above $21 a share.

Traders can look to buy RKUS off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day at $12.86 a share, or just below $12 a share. One could also buy RKUS 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.

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

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:
>>5 Stocks Insiders Are Scooping Up

>>5 Rocket Stocks to Buy for Earnings Season

>>4 Hot Stocks to Trade (or Not)

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 Delafield, 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.