Stock Quotes in this Article: CLNE, HRT, UNXL, JIVE, MACK

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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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.

Uni-Pixel


One technology player that's starting to move within range of triggering a near-term breakout trade is Uni-Pixel (UNXL), which delivers performance-engineered films to the display, touch screen and flexible electronics market segments in the U.S. This stock has been hit hard by the bears so far in 2014, with shares off sharply by 45%.

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If you take a look at the chart for Uni-Pixel, you'll notice that this stock has been downtrending badly for the last four months, with shares sliding lower form its high of $10.96 to its recent low of $5.07 a share. During that downtrend, shares of UNXL have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of UNXL are now starting to bounce higher above that $5.07 low and it's quickly moving within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in UNXL if it manages to break out above some near-term overhead resistance levels at $5.55 to $6 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 272,616 shares. If that breakout triggers soon, then UNXL will set up to re-test or possibly take out its next major overhead resistance levels $7 to its 50-day moving average of at $7.76 a share.

Traders can look to buy UNXL off weakness to anticipate that breakout and simply use a stop that sits right below its recent low of $5.07 a share or around its 52-week low at $4.80 a share. One can also buy UNXL 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.

Arrhythmia Research Technology


A health care player that's starting to rip higher and move within range of triggering a near-term breakout trade is Arrhythmia Research Technology (HRT), which engages in the development and distribution of signal-averaged electrocardiographic software under the Predictor brand name. This stock is off to a strong start in 2014, with shares up sharply by 63%.

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If you take a look at the chart for Arrhythmia Research Technology, you'll notice that this stock is gapping sharply higher today back above its 50-day moving average of $4.96 a share with strong upside volume. The volume so far today has hit over 50,000 shares, which is well above its three-month average action of 16,900 shares. This spike higher has started to push shares of HRT into breakout territory, since the stock has taken out some near-term overhead resistance at $5.02 a share. Shares of HRT are now starting to trend within range of triggering a much bigger breakout trade.

Traders should now look for long-biased trades in HRT if it manages to break out above some near-term overhead resistance levels at $5.30 to $5.48 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 16,900 shares. If that breakout triggers soon, then HRT will set up to re-test or possibly take out its next major overhead resistance level at its 52-week high of $6.98 a share.

Traders can look to buy HRT off weakness to anticipate that breakout and simply use a stop that sits right below Friday's intraday low of $4.93 a share or around more near-term support at $4.75 a share. One could also buy HRT 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.

Merrimack Pharmaceuticals


Another biopharmaceutical player that's starting to trend within range of triggering a big breakout trade is Merrimack Pharmaceuticals (MACK), which is engaged in discovering, developing and preparing to commercialize medicines paired with companion diagnostics for the treatment of cancer primarily in the U.S. This stock is off to a strong start in 2014, with shares up by over 24%.

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If you take a glance at the chart for Merrimack Pharmaceuticals, you'll notice that this stock is spiking notably higher today right above some near-term support at $6.10 a share. This spike higher today is coming after shares of MACK recently gapped up sharply from under $4.50 to $7.65 a share with massive upside volume. This move higher today is starting to push shares of MACK within range of triggering a major breakout trade above some key near-term overheard resistance levels.

Traders should now look for long-biased trades in MACK if it manages to break out above some near-term overhead resistance levels at $7.01 a share to its 52-week high at $7.65 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 2 million shares. If that breakout materializes soon, then MACK will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $9 to $10 a share.

Traders can look to buy MACK off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $6.10 a share. One can also buy MACK off strength once it clears those breakout levels share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Clean Energy Fuels


Another alternative energy player that's starting to trend within range of triggering a major breakout trade is Clean Energy Fuels (CLNE), which provides natural gas as an alternative fuel for vehicle fleets. It designs, builds, operates and maintains fueling stations. This stock is off to a rough start in 2014, with shares down by 22%.

If you look at the chart for Clean Energy Fuels, you'll notice that this stock is exploding higher today following its earnings report right off its 50-day moving average of $9.05 a share with heavy upside volume. Volume so far on Friday has already eclipsed 3.6 million shares, which is well above its three-month average action of 1.54 million shares. This spike has already pushed shares of CLNE into breakout territory, since the stock has taken out some near-term overhead resistance levels at $9.50 to $9.62 a share and $9.90 a share. Shares of CLNE are now quickly moving within range of triggering an even bigger breakout trade.

Traders should now look for long-biased trades in CLNE if it manages to break out above Friday's intraday high of $10.17 a share to some past resistance at just above $10.25 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 1.54 million shares. If that breakout hits soon, then CLNE will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $11.33 to $12.15 or $12.50 a share.

Traders can look to buy CLNE off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $9.05 a share. One can also buy CLNE 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.

Jive Software


My final breakout trading prospect is technology player Jive Software (JIVE), which provides a social business software platform to businesses, government agencies and other enterprises. This stock has been hit hard by the sellers so far in 2014, with shares off by 26%.

If you look at the chart for Jive Software, you'll see that this stock has been uptrending a bit over the last few weeks, with shares moving higher from its low of $6.84 a share to its recent high of $8.58 a share. During that move, shares of JIVE have been making mostly higher lows and higher highs, which is bullish technical price action. Shares of JIVE are now starting to flirt with its 50-day moving average of $8.01 a share. That move has now pushed shares of JIVE within range of triggering a near-term breakout trade above a key downtrend line.

Traders should now look for long-biased trades in JIVE if it manages to break out above some near-term overhead resistance levels at $8.29 to $8.58 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 912,519 shares. If that breakout triggers soon, then JIVE will set up to re-test or possibly take out its next major overhead resistance levels $9 to $9.45 a share. Any high-volume move above those levels will then give JIVE a chance to tag $10.25 to its 200-day moving average at $10.51 a share.

Traders can look to buy JIVE off weakness to anticipate that breakout and simply use a stop that sits right below some near-term support at $7.50 a share or near more support at $7.16 a share. One can also buy JIVE off strength once it starts to take out 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.