Stock Quotes in this Article: BIOC, CYTR, HEB, MNGA, VVUS, SCTY

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 who can ultimately push the stock significantly higher.

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One example of a successful breakout trade I flagged recently was biotechnology player CytRx (CYTR), which I featured in May 22's "5 Stocks Under $10 Set to Soar" at around $3.50 a share. I mentioned in that piece that shares of CytRx had been uptrending over the last month and change, with shares moving higher from its low of $2.78 to $3.68 a share. This stock was just starting to spike higher right off its 50-day moving average and it was quickly pushing within range of triggering a big breakout trade above some key resistance levels at $3.68 to $3.86 a share.

Guess what happened? Shares of CytRx triggered that breakout the following week and this stock has not looked back since. Shares of CYTR tagged an intraday high today of $5.46 a share, which represents a massive gain of close to 55% in just a few weeks for anyone who bought shares of CYTR into that breakout. As you can see, trading breakouts can deliver huge profits very quickly once a stock takes out key resistance levels and continues to uptrend.

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.

Magnegas


One alternative energy player that's starting to move within range of triggering a big breakout trade is Magnegas (MNGA), which creates and produces hydrogen-based alternative fuel through the gasification of liquid waste. This stock is off to a monster start so far in 2014, with shares up a whopping 277%.

If you take a look at the chart for Magnegas, you'll notice that this stock has been uptrending for the last month and change, with shares moving higher from its low of $1.12 to its recent high of $1.83 a share. During that uptrend, shares of MNGA have been making mostly higher lows and higher highs, which is bullish technical price action. Shares of MNGA have now started to spike higher right off its 50-day moving average and it's quickly pushing within range of triggering a big breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in MNGA if it manages to break out above some near-term overhead resistance levels at $1.70 to $1.83 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 3.21 million shares. If that breakout materializes soon, then MNGA will set up to re-test or possibly take out its next major overhead resistance level at its 52-week high of $2.45 a share.

Traders can look to buy MNGA off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $1.40 a share. One can also buy MNGA 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.

Vivus


A biotechnology player that's starting to trend within range of triggering a big breakout trade is Vivus (VVUS), which develops and commercializes therapies to address unmet needs in obesity, sleep apnea, diabetes and sexual health in the U.S. and the European Union.  This stock has been hammered lower by the bears so far in 2014, with shares off sharply by 41%.

If you take a look at the chart for VIVUS, you'll notice that this stock recently formed a double bottom chart pattern at $4.56 to $4.69 a share. Following that bottom, shares of VVUS have started to spike higher and uptrend with the stock crossing back above its 50-day moving average of $5.08 a share. That move has now started to push shares of VVUS within range of triggering a big breakout trade above some key near-term overhead resistance levels.

Traders should now look for long-biased trades in VVUS if it manages to break out above some near-term overhead resistance levels at $5.43 to $5.44 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 3.06 million shares. If that breakout begins soon, then VVUS will set up to re-test or possibly take out its next major overhead resistance levels at $5.95 to $6.28, or even $6.40 a share. Any high-volume move above $6.40 will then give VVUS a chance to re-fill its previous gap-down-day zone from February that started at $7 a share.

Traders can look to buy VVUS off weakness to anticipate that breakout and simply use a stop that sits right below $4.90 a share or around those double bottom support levels. One could also buy VVUS 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.

Biocept


Another stock that's starting to move within range of triggering a major breakout trade is Biocept (BIOC), which develops and commercializes proprietary circulating tumor cell and circulating tumor DNA tests utilizing a standard blood sample.  This stock has been hit hard by the sellers over the last six months, with shares dropping sharply lower by 39%.

If you take a glance at the chart for Biocept, you'll see that this stock gapped up sharply higher yesterday back above its 50-day moving average of $5.13 a share with strong upside volume. Volume on Thursday registered 154,000 shares, which is well above its three-month average action of 24,689 shares. Shares of BIOC are spiking notably higher again today and the stock is quickly moving within range of triggering a major breakout trade above some key near-term overhead resistance levels.

Traders should now look for long-biased trades in BIOC if it manages to break out above some near-term overhead resistance levels at $5.85 to $6 a share with high volume. Watch for a sustained move or close above those levels with volume that registers near or above its three-month average action of 24,686 shares. If that breakout kicks off soon, then BIOC will set up to re-test or possibly take out its next major overhead resistance levels at $6.76 to $7.79 a share, or even $8 to $8.50 a share.

Traders can look to buy BIOC off weakness to anticipate that breakout and simply use a stop that sits just below its 50-day moving average of $5.13 a share. One can also buy BIOC off strength once it starts to take out those breakout levels share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Hemispherx Biopharma


Another specialty pharmaceutical player that's starting to trend within range of triggering a near-term breakout trade is Hemispherx Biopharma (HEB), which is engaged in the clinical development of new drug therapies based on natural immune system enhancing technologies for the treatment of viral and immune based chronic disorders in the U.S. This stock is off to a hot start in 2014, with shares up sharply by 29%.

If you look at the chart for Hemispherx Biopharma, you'll see that this stock has formed a major bottoming chart pattern over the last two months and change, with shares of HEB finding buying interest each time it has pulled back to around 32 to 30 cents per share. That buying support has also come right above HEB's 200-day moving average over that timeframe. Shares of HEB are now starting to spike higher right off its 50-day moving average of 34 cents per share and that spike is quickly pushing the stock within range of triggering a near-term breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in HEB if it manages to break out above some near-term overhead resistance levels at 35 to around 38 cents per 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 1.44 million shares. If that breakout gets underway soon, then HEB will set up to re-test or possibly take out its next major overhead resistance levels at 42 to around 50 cents per share., or even its 52-week high at 55 cents per share.

Traders can look to buy HEB off weakness to anticipate that breakout and simply use a stop that sits just below those major support levels at 32 to 30 cents per share. One can also buy HEB off strength once it starts to bust above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

SolarCity


My final breakout trading prospect is solar energy player SolarCity (SCTY), which designs, installs and sells or leases solar energy systems to residential and commercial customers, and government entities in the U.S. This stock has been hit hard by the bears over the last three months, with shares off sharply by 30%.

If you look at the chart for SolarCity, you'll see that this stock recently formed a double bottom chart pattern at $45.79 to $46.11 a share. Following that bottom, shares of SCTY have started to uptrend a bit and the stock is now starting to push within range of triggering a big breakout trade above some key near-term overhead resistance levels.

Traders should now look for long-biased trades in SCTY if it manages to break out above its 50-day at $53.31 to its 200-day at $56.33 a share and then once it clears more key overhead resistance levels at $56.62 to $56.77 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 5.01 million shares. If that breakout starts soon, then SCTY will set up to re-test or possibly take out its next major overhead resistance levels at $62 to $66 a share.

Traders can look to buy SCTY off weakness to anticipate that breakout and simply use a stop that sits right around those double bottom support levels. One can also buy SCTY 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.