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 mobile Internet services player NQ Mobile (NQ), which I featured in Jan. 31's "5 Stocks Ready to Break Out" at $16.85 share. I mentioned in that piece that shares of NQ Mobile had been uptrending strong over the last two months, with shares making mostly higher lows and higher highs, which is bullish technical price action. That uptrend was starting to push shares of NQ within range of triggering a big breakout trade above some near-term overhead resistance levels at $18 to $18.50 a share.

Guess what happened? Shares of NQ started to flirt with those breakout levels on February 10. This stock has not looked back since with shares uptrending strong to its intraday high today of $21.69 a share. That move represents a fat gain of close to 30% since the time I flagged this breakout setup for shares of NQ. As you can see, trading breakouts can product solid gains once a stock clears a level that the sellers had control of. Shares of NQ might not be done going higher since the uptrend remains strong, so keep this name on your trading radar.

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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.

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

Best Buy


One electronics retailer that's starting to trend within range of triggering a near-term breakout trade is Best Buy (BBY), which operates as an e-commerce and physical retailer of consumer electronics in the U.S., Europe, Canada and China. This stock has been hit hard by the sellers so far in 2014, with shares down by 33%.

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If you take a look at glance at the chart for Best Buy, you'll notice that this stock recently gapped down sharply from $37.85 to under $26 with strong downside volume. Following that move, shares of BBY continued to slide lower as the stock went on to tag a new low of $22.15 a share. Shares of BBY found a bottom at $22.15 and the stock has now reversed its direction and entered an uptrend, with shares tagging a recent high of $28.20 a share. Shares of BBY are now starting to spike higher and move within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in BBY if it manages to break out above some near-term overhead resistance at $28.20 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average volume of 10.26 million shares. If that breakout begins soon, then BBY will set up to re-fill some of its previous gap-down-day zone from January that started at $37.85 a share.

Traders can look to buy BBY off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $24 a share. One can also buy BBY 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.

InterCloud Systems


A business services player that's starting to uptick and move within range of triggering a big breakout trade is InterCloud Systems (ICLD), which provides a single-source end-to end IT and telecom solutions to the service provider and corporate enterprise markets through cloud platforms and professional services in the U.S. This stock has been on fire over the last three months, with shares up big by 88%.

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If you take a look at the chart for InterCloud Systems, you'll notice that this stock recently formed a double bottom chart pattern at $12.22 to $12.55 a share. Shares of ICLD are now starting to spike higher off those support levels and it's quickly moving 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 ICLD if it manages to break out above its 50-day moving average of $14.22 a share and then once it takes out more key overhead resistance at $15.25 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 847,007 shares. If that breakout gets underway soon, then ICLD will set up to re-test or possibly take out its next major overhead resistance levels at $17.57 to $18.35 a share, or even its 52-week high at $19.39 a share.

Traders can look to buy ICLD off weakness to anticipate that breakout and simply use a stop that sits right below those major support levels at $12.55 to $12.22 a share. One could also buy ICLD off strength once it busts above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

EnteroMedics


Another medical device player that's quickly moving within range of triggering a major breakout trade is EnteroMedics (ETRM), which focuses on the design and development of devices that use neuroblocking technology to treat obesity, metabolic diseases and other gastrointestinal disorders. This stock has been in play with the bulls over the last six months, with shares up sharply by 133%.

If you take a glance at the chart for EnteroMedics, you'll see that this stock has been uptrending strong over the last month, with shares moving higher from its low of $1.86 to its recent high of $2.55 a share. During that uptrend, shares of ETRM have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of ETRM within range of triggering a major breakout trade.

Traders should now look for long-biased trades in ETRM if it manages to break out above some near-term overhead resistance at $2.55 a share to its 52-week high at $2.66 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 1.85 million shares. If that breakout kicks off soon, then ETRM will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are its next major overhead resistance levels at $320 to $3.30 or even $3.75 a share.

Traders can look to buy ETRM off weakness to nticipate that breakout and simply use a stop that sits right below its 50-day at $2.22 a share. One can also buy ETRM 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.

Popular


Another stock that's starting to push within range of triggering a big breakout trade is Popular (BPOP), which provides a range of retail and commercial banking products and services primarily to institutional and retail customers in Puerto Rico and the Mainland U.S. This stock is down a bit over the last six months, with shares off by 8%.

If you consult the chart for Popular, you'll notice that this stock has been consolidating and trending sideways for the last four months, with shares moving between $24.71 on the downside and $29.34 on the upside. Shares of BPOP are spiking notably higher here right off its 50-day moving average of $27.78 a share with decent upside volume. This spike is quickly pushing shares of BPOP within range of triggering a big breakout trade above the upper-end of its recent sideways trading chart pattern.

Traders should now look for long-biased trades in BPOP if it manages to break out above its 200-day moving average of $28.96 a share and then once it takes out more key overhead resistance levels at $29.09 to $29.34 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 983,320 shares. If that breakout hits soon, then BPOP will set up to re-test or possibly take out its next major overhead resistance level at its 52-week high of $34.34 a share. Any high-volume move above that level will then give BPOP a chance to tag $40 a share.

Traders can look to buy BPOP off weakness to anticipate that breakout and simply use a stop that sits right around some near-term support levels at $27 to $26 a share. One can also buy BPOP 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.

Goldman Sachs Group


My final breakout trading prospect is investment banking leader Goldman Sachs Group (GS), which provides investment banking, securities and investment management services, as well as financial services to corporations, financial institutions, governments and high-net-worth individuals worldwide. This stock is up modestly over the last six months, with shares higher by around 9%.

If you look at the chart for Goldman Sachs Group, you'll notice that this stock recently formed a double bottom chart pattern at $159.23 to $160.77 a share. That bottom formed right in the vicinity of its 200-day moving average of $162.43 a share. This stock is now starting to spike higher off those support level and its staring to take out some near-term overhead resistance at $166.85 a share. That move is quickly pushing shares of GS within range of triggering a near-term breakout trade above a key moving average.

Traders should now look for long-biased trades in GS if it manages to break out above its 50-day moving average of $169.42 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 3.12 million shares. If that breakout materializes soon, then GS will set up to re-test or possibly take out its next major overhead resistance levels at $175 to its 52-week high at $181.13 a share. Any high-volume move above that level will then give GS a chance tag $185 to $190 a share.

Traders can look to buy GS off weakness to anticipate that breakout and simply use a stop that sits right below its 200-day moving average of $162.43 a share or down near those double bottom support levels at $160.77 to $159.23 a share. One can also buy GS off smashes above its 50-day at $169.42 a share 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.