Stock Quotes in this Article: ANIK, CLNT, SSYS, TNAV, XONE

 WINDERMERE, Fla. (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.

One example of a successful breakout trade I recently flagged was biotechnology and drugs stock Atossa Genetics (ATOS), which I featured in Mar. 15’s “5 Stocks Poised for Breakouts” at around $7.70 a share. I mentioned in that piece that shares of ATOS had recently formed a double-bottom chart pattern at around $6.10 to $6.20 a share. After marking that bottom, shares of ATOS were starting to rip higher off the double-bottom area, and the stock was quickly moving within range of triggering a major breakout trade. That trade was set to trigger once ATOS cleared some near-term overhead resistance at $8.25 a share and then once it took out its all-time high of $9.45 a share with high volume.

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Guess what happened? Shares of ATOS started to trigger that technical breakout the next trading session with heavy upside volume, after the stock closed above $8.25 and above $9 a share. The stock then took out $9.45 a share with heavy upside volume on Tuesday, and it exploded to the upside and hit a new all-time high of $12.40 a share. That’s a monster gain in just a few trading sessions for anyone who played that technical breakout. Shares of ATOS could still trigger another breakout trade if the stock can now clear its all-time high of $12.40 a share with high volume.

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.

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Stratasys

One stock that’s quickly moving within range of triggering a near-term breakout trade is Stratasys (SSYS), a global provider of additive manufacturing solutions for the creation of parts used in the processes of designing and manufacturing products and for the direct manufacture of end parts. This stock is off to a slow start in 2013, with shares off by 6.3%.

If you take a look at the chart for Stratasys, you’ll notice that this stock has just started to break out above some near-term overhead resistance levels at $73.38 to $74.17 a share. Volume so far today is tracking in below its three-month average action of 875,403 a shares, since only 326,000 shares have traded to this point. This move is quickly pushing shares of SSYS within range of triggering another near-term breakout trade.

Traders should now look for long-biased trades in SSYS if it manages to break out above its 50-day moving average of $75.17 a share and then once it takes out more overhead resistance at $77.50 a share with volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 875,403 shares. If that breakout triggers soon, then SSYS will set up to re-test or possibly take out its next major overhead resistance levels at $84 to $87.50 a share. Any high-volume move above those levels will then put its all-time high at $92.30 into range for shares of SSYS.

Traders can look to buy SSYS off any weakness to anticipate that breakout and simply use a stop that sits right around today’s low of $72.55 a share. One could also buy SSYS off strength once it takes out those breakout levels with volume and then simply use a stop right below $74 a share.

Keep in mind that this stock is popular among the short sellers, since the current short interest as a percentage of the float of SSYS is pretty high at 10.7%. If that breakout can be sustained, then shares of SSYS could easily see a large short-squeeze develop in the near future.

ExOne

Another stock that’s trending within range of triggering a major breakout trade is ExOne (XONE), which develops, manufactures and markets printing machines that produce 3D printed parts and related consumables. This stock is off to a hot start in 2013, with shares up 19%.

If you take a look at the chart for ExOne, you’ll see that this stock has been uptrending extremely strong for the last month and change, with shares soaring higher from its low of $24.13 to its intraday high of $32.30 a share. During that uptrend, shares of XONE have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of XONE within range of triggering a major breakout trade.

Market players should now look for long-biased trades in XONE if it manages to break out above its all-time high of $33.60 a share with high volume. Look for a sustained move or close above $33.60 a share with volume that hits near or above its three-month average volume of 917,637 shares. If that breakout triggers soon, then XONE will set up to enter new all-time high territory, which is bullish technical price action. Some possible upside targets off that move are $40 to $45 a share.

Traders can look to buy XONE off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support areas at $30 to $29.23 a share. One could also buy off strength once XONE clears $33.60 a share with volume and then simply use a stop that sits a few percentage points below your entry point.

This stock has explosive breakout potential since the short-sellers are leaning all over it. The current short interest as a percentage of the float for XONE is very high at 19.6%. That high short interest could fuel a big move, so make sure to put XONE on your breakout trading radar.

Cleantech Solutions

One name that’s starting to heat up and move within range of triggering a near-term breakout trade is Cleantech Solutions (CLNT), which is engaged in manufacturing and selling high-precision forged rolled rings, yaw bearings and shafts. It also manufactures and sells textile dyeing and finishing machines. This stock hasn’t done much in 2013, with shares off by 7%.

If you look at the chart for Cleantech Solutions, you’ll notice that this stock has just started to bounce higher right above its 200-day moving average of $3.23 a share. That bounce is quickly pushing shares of CLNT within range of triggering a near-term breakout trade.

Market players should now look for long-biased trades in CLNT if it manages to break out above its 50-day moving average of $3.89 a share and then once it clears more overhead resistance at $4.09 a share with high volume. Look for a sustained move or close above those breakout levels with volume that hits near or above its three-month average action of 25,293 shares. If that breakout triggers soon, then CLNT will set up to re-test or possibly take out its next major overhead resistance levels at $4.88 to $5.04 a share, or even at $5.50 to $6.38 a share.

Traders can look to buy CLNT off any weakness to anticipate that breakout and simply use a stop that sit right around its 200-day moving average at $3.23 a share or at $3.09 a share. One can also buy CLNT off strength once it clears those breakout levels with volume and then simply use a stop that’s a few percentage points from your entry point.

This is another favorite target of the short-sellers, since the current short interest as a percentage of the float for CLNT is rather high at 11.4%. We could easily get a large short-squeeze in CLNT, so make sure to keep your eye on this name if it triggers soon.

Anika Therapeutics

Another stock that looks poised to trigger a near-term breakout trade is Anika Therapeutics (ANIK), which develops, manufactures and commercializes therapeutic products for tissue protection, healing and repair. This stock has been blazing a trail to the upside so far in 2013, with shares up a whopping 43%.

If you look at the chart for Anika Therapeutics, you’ll notice that this stock has been trending sideways for the last month, with shares moving between $14.58 on the upside and $13.21 on the downside. Shares of ANIK have recently spiked higher off that $13.21 low, and it’s now quickly moving within range of triggering a near-term breakout trade above the upper-end of its recent sideways chart pattern.

Traders should now look for long-biased trades in ANIK if it manages to break out above some near-term overhead resistance levels at $14.48 to $14.58 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 89,389 shares. If that breakout triggers soon, then ANIK will set up to re-test or possibly take out its next major overhead resistance levels at $15.50 to $16.29 a share. Any high-volume move above those levels will then put its 52-week high of $17.70 into range for shares of ANIK.

Traders can look to buy ANIK off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $13.50 to $13.21 a share. One can also buy off strength once ANIK takes out those breakout levels with volume and then simply use a stop that sits just below $14 a share.

Telenav

One more stock that’s trending very close to triggering a near-term breakout trade is Telenav (TNAV), a provider of location-based services, including voice-guided navigation, on mobile phones. This stock has been trending lower so far in 2013, with shares off by 16%.

If you look at the chart for Telenav, you’ll notice that this stock has been downtrending badly for the last three months, with shares dropping lower from its high of $8.40 to its recent low of $6.31 a share. During that downtrend, shares of TNAV have been mostly making lower highs and lower lows, which is bearish technical price action. That said, shares of TNAV have just started to bounce off that $6.31 low, and it’s quickly moving within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in TNAV if it manages to break out above some near-term overhead resistance at $6.78 a share and then above its 200-day at $6.79 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 168,205 shares. If that breakout triggers soon, then TNAV will set up to re-test or possibly take out its 50-day moving average of $7.41 a share, or more overhead resistance levels at $7.46 to $7.96 a share.

Traders can look to buy TNAV off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $6.31 a share. One could also buy TNAV off strength once it takes out those breakout levels with volume and then simply use the same stop at around $6.31 a share.

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

-- Written by Roberto Pedone in Winderemere, Fla.

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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., 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.