Stock Quotes in this Article: FSYS, NBG, OSIR, ANAC, ONTX

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

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One example of a successful breakout trade I flagged recently was air pollution control technology player Fuel Tech (FTEK), which I featured in Nov. 7's "5 Stocks Under $10 Set to Soar" at $4.50 share. I mentioned in that piece that shares of FTEK were consolidating in a tight chart pattern for a month, with shares moving between $4.19 on the downside and $4.78 on the upside. This stock was just starting to trend higher and move within range of triggering a big breakout trade above some near-term overhead resistance levels at $4.66 to $4.68 a share, and then above $4.78 to $5.20 a share.

Guess what happened? Shares of FTEK triggered that breakout on November 12 with monster upside volume. This stock has continued to uptrend strong since entering breakout territory, with FTEK tagging a new 52-week high at $7.76 a share on last Friday. That represents a monster gain of 70% from when I wrote the original article. You can see here what a stock is capable of when it breaks out with strong upside volume flows.

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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.

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

Anacor Pharmaceuticals

One biotechnology player that's starting to trend within range of triggering a big breakout trade is Anacor Pharmaceuticals (ANAC), which is engaged in the discovery, development and commercialization of novel small molecule therapeutics derived from its novel boron chemistry platform. This stock has been on fire so far in 2013, with shares up huge by 169%.

If you take a look at the chart for Anacor Pharmaceuticals, you'll notice that this stock has been uptrending strong for the last two months, with shares moving higher from its low of $9.84 to its recent high of $14.56 a share. During that uptrend, shares of ANAC have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of ANAC within range of triggering a big breakout trade.

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Traders should now look for long-biased trades in ANAC if it manages to break out above last Friday's high of $14.11 to its 52-week high at $14.56 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 344,886 shares. If that breakout hits soon, then ANAC will set up to enter new 52-week high territory, which is bullish technical price action. Some possible upside targets off that breakout are $18 to $20 a share.

Traders can look to buy ANAC off any weakness to anticipate that breakout and simply use a stop that sits right around its 50-day moving average of $12.33 a share. One can also buy ANAC 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.

National Bank of Greece

Another banking player that's starting to trend within range of triggering a major breakout trade is National Bank of Greece (NBG), which is engaged in providing financial services which include retail & commercial banking, global investment management, investment banking, insurance, investment activities and securities trading. This stock has been hit hard by the bears so far in 2013, with shares off sharply by 64%.

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If you take a look at the chart for National Bank of Greece, you'll notice that this stock broke out above some near-term overhead resistance levels on last Friday at $5.91 to $6.02 a share with strong upside volume. That move is quickly pushing shares of NBG within range of triggering an even bigger breakout trade.

Traders should now look for long-biased trades in NBG if it manages to break out above some near-term overhead resistance at $6.48 a share to its 200-day moving average at $6.81 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 4.84 million shares. If that breakout hits soon, then NBG could possibly tag $9 to $10, or even $11 a share.

Traders can look to buy NBG off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $5.75 a share, or near its 50-day moving average of $5.30 a share. One could also buy NBG off strength once it starts to clear those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Osiris Therapeutics

One stem cell therapeutic player that's starting to trend within range of triggering a major breakout trade is Osiris Therapeutics (OSIR), which is focused on developing and marketing products to treat medical conditions in the inflammatory, orthopedic and cardiovascular areas. This stock has been on fire so far in 2013, with shares ripping higher by 95%.

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If you take a look at the chart for Osiris Therapeutics, you'll notice that this stock formed a major bottoming pattern over the last month and change, with shares finding buying interest each time it pulled back near $14 to $13 a share. Shares of OSIR have now started to rebound off those support levels and trend back above its 50-day moving average at $16.22 a share. That move is starting to push shares of OSIR within range of triggering a major breakout trade.

Traders should now look for long-biased trades in OSIR if it manages to break out above some near-term overhead resistance levels at $17.95 to $19.75 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 366,419 shares. If that breakout triggers soon, then OSIR will set up for a possible run back towards its next major overhead resistance levels at $22 o its 52-week high at $27.40 a share.

Traders can look to buy OSIR off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $16.22 a share, or near $15 a share. One can also buy OSIR 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.

Fuel Systems Solutions

Another alternative energy player that's quickly moving within range of triggering a major breakout trade is Fuel Systems Solutions (FSYS), which designs, manufactures and supplies alternative fuel components and systems for transportation and industrial applications. This stock has been hit hard by the sellers during the last three months, with shares off sharply by 28%.

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If you look at the chart for Fuel Systems Solutions, you'll notice that this stock gapped down big a few weeks ago from around $17 to below $14 a share with heavy downside volume. Following that plunge, shares of FSYS have started to consolidate and base with the stock forming a double bottom at $13.06 to $13.10 a share. Shares of FSYS have now started to spike higher off those support levels and it's quickly moving within range of triggering a major breakout trade.

Traders should now look for long-biased trades in FSYS if it manages to break out above last Friday's high of $13.81 a share, and then once it takes out some more near-term overhead resistance levels at $14.01 to $14.09 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 139,228 shares. If that breakout hits soon, then FSYS will set up to re-fill some of its previous gap down zone that started near $17 a share. This stock could easily tag $16 to $17, or even trade up $18 or $19 a share if that gap gets filled with strong upside volume flows.

Traders can look to buy FSYS off any weakness to anticipate that breakout and simply use a stop that sits right below its 52-week low at $13.06 a share. One can also buy FSYS 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.

Onconova Therapeutics

My final breakout trading prospect is clinical-stage biopharmaceutical player Onconova Therapeutics (ONTX), which is engaged in the discovery and development of small molecule product candidates for the treatment of cancer. This stock has been under pressure by the bears so far in 2013, with shares down by 26%.

If you look at the chart for Onconova Therapeutics, you'll notice that this stock recently reversed a major downtrend and entered a new uptrend, after the stock hit a new all-time low of $11.73 a share. During that uptrend, shares of ONTX have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of ONTX within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in ONTX if it manages to break out above some near-term overhead resistance levels at $15.40 to $16.91 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 218,953 shares. If that breakout triggers soon, then ONTX will set up to re-test or possibly take out its next major overhead resistance levels at $18.66 to its 50-day moving average of $19.25 a share. Any high-volume move above those levels will then give ONTX a chance to tag $22 to $23 a share.

Traders can look to buy ONTX off any weakness to anticipate that breakout and simply use a stop that sits right below some near-term support at $13.50 a share, or just below $13 a share. One can also buy ONTX off strength once it starts to clear 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.

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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.