Stock Quotes in this Article: ATRM, IPCI, LJPC, MY, PTLA, AGIO

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 China-based wind turbine maker China Ming Yang Wind Power (MY), which I featured in Feb. 26's "5 Stocks Ready to Explode Higher" at $2.86 share. I mentioned in that piece that shares of China Ming Yang Wind Power were starting to spike higher right above its 50-day moving average with monster upside volume. That spike was quickly pushing shares of MY within range of triggering a major breakout trade above some key overhead resistance levels at $2.98 to $3.11 a share.

Guess what happened? Shares of China Ming Yang Wind Power triggered that breakout the following trading session with monster upside volume once again. This stock continued to explode higher into the following week, with shares of MY tagging a new 52-week high of $4.34 a share. That represents a massive gain of just over 50% in a very short timeframe for anyone who snapped up this stock and anticipated the breakout. You can see here what can happen when a stock triggers a breakout 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.

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

IntelliPharmaCeutics International


One pharmaceutical player that's starting to move within range of triggering a big breakout trade is IntelliPharmaCeutics International (IPCI), which researches, develops and manufactures novel and generic controlled and targeted-release oral solid dosage drugs in Canada. This stock is off to a decent start in 2014, with shares up by 9%.

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If you take a look at glance at the chart for IntelliPharmaCeutics International, you'll notice that this stock has been trending sideways inside of a range for the last three months, with shares moving between $3.05 on the downside and $4.62 on the upside. Shares of IPCI have been hugging its 50-day moving average over the last few weeks, as the stock has trended up a bit from its low of $3.50 to its recent high of $4.24 a share. This stock is now starting to move within range of triggering a big breakout trade above the upper-end of its sideways trading chart pattern.

Traders should now look for long-biased trades in IPCI if it manages to break out above some near-term overhead resistance levels at $4.24 to $4.48 a share and then once it clears some past resistance at $4.62 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 608,240 shares. If that breakout lights off soon, then IPCI will set up to re-test or possibly take out its next major overhead resistance level at its 52-week high of $6.46 a share.

Traders can look to buy IPCI off weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support levels at $3.50 to $3.30 a share. One can also buy IPCI 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.

La Jolla Pharmaceutical


A biotechnology player that's starting to trend within range of triggering a big breakout trade is La Jolla Pharmaceutical (LJPC), which focuses on the discovery, development and commercialization of therapeutics for chronic organ failure and cancer. This stock hasn't done much so far in 2014, with shares virtually flat.

This company is scheduled to do a presentation at the 26th Annual Roth Conference On March 10, 2014 at 2:30 PM pacific time. The firm will be presenting an update on the phase 2 clinical study of GCS-100 for the treatment of chronic kidney disease. This news could move the stock significantly, so keep that in mind and understand this is a very speculative stock, but I like how it's looking technically.

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If you take a look at the chart for La Jolla Pharmaceutical, you'll see that this stock recently gapped sharply higher back above its 50-day moving average of $7.96 a share with heavy upside volume. That spike is starting to push shares of LJPC 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 LJPC if it manages to break out above some near-term overhead resistance levels at $9.75 to $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 194,429 shares. If that breakout triggers soon, then LJPC will set up to re-test or possibly take out its 52-week high at $12 a share. Any high-volume move above that level will then give LJPC a chance to tag $15 a share.

Traders can look to buy LJPC off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $7.96 a share or around more key support levels $7.40 to $7 a share. One could also buy LJPC 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.

Aetrium


Another semiconductor player that's beginning to trend within range of triggering a big breakout trade is Aetrium (ATRM), which designs, manufactures and markets various electromechanical and electro thermal equipment used in the handling and testing of integrated circuits. This stock has been red hot over the last six months, with shares up sharply by 91%.

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If you take a glance at the chart for Aetrium, you'll see that this stock recently formed a double bottom chart pattern at $5.51 to $5.80 a share. Following that bottom, shares of ATRM have started to uptrend and flirt with its 50-day moving average of $6.37 a share. That move is starting to push shares of ATRM within range of triggering a near-term breakout trade above some resistance levels and a key downtrend line.

Traders should now look for long-biased trades in ATRM if it manages to break out above some near-term overhead resistance levels at $6.20 to $6.68 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 35,723 shares. If that breakout materializes soon, then ATRM will set up to re-test or possibly take out its next major overhead resistance levels at $8.03 to $8.20 a share. Any high-volume move above those levels will then give ATRM a chance to tag its next major overhead resistance levels at $9 to $11 a share.

Traders can look to buy ATRM off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $5.80 to $5.51 a share or near its 200-day moving average at $5.17 a share. One can also buy ATRM off strength once it busts above those breakout levels share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Portola Pharmaceuticals


Another biotechnology player that's starting to trend within range of triggering a near-term breakout trade is Portola Pharmaceuticals (PTLA), which focuses on the development and commercialization of therapeutics for the treatment of thrombosis, other hematologic disorders, and inflammation. This stock has done virtually nothing so far in 2014, with shares up just 2%.

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If you look at the chart for Portola Pharmaceuticals, you'll notice that this stock has been finding buying interest over the last four months, each time its pulled back to around $23 to just below $22 a share. Shares of PTLA are spiking higher today and flirting with its 50-day moving average of $26.45 a share. That move is starting to push shares of PTLA within range of triggering a near-term breakout trade above a key downtrend line.

Traders should now look for long-biased trades in PTLA if it manages to break out above some near-term overhead resistance levels at $27 to $28.50 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 311,918 shares. If that breakout gets underway soon, then PTLA will set up to re-test or possibly take out its all-time high at $30.95 a share. Any high-volume move above that level will then give PTLA a chance to tag $35 to $40 a share.

Traders can look to buy PTLA off weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support levels at $24 or at $23 a share. One can also buy PTLA 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.

Agios Pharmaceuticals


My final breakout trading prospect is biotechnology player Agios Pharmaceuticals (AGIO), which focuses on the development and commercialization of therapeutics in the field of cancer metabolism and inborn errors of metabolism in the U.S. This stock has been on fire so far in 2014, with shares up huge by 76%.

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If you look at the chart for Agios Pharmaceuticals, you'll see that this stock is ripping higher here by around 6% with above-average volume. Volume so far today has already registered over 290,000 shares, which is just starting to surpass its three-month average action of 283,008 shares. This sharp spike higher is quickly pushing shares of AGIO within range of triggering a major breakout trade that could push the stock into new all-time high territory.

Traders should now look for long-biased trades in AGIO if it manages to break out above some near-term overhead resistance levels at $42.92 a share to its all-time high at $44.04 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 283,008 shares. If that breakout triggers soon, then AGIO will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that move are $55 to $65 a share.

Traders can look to buy AGIO off weakness to anticipate that breakout and simply use a stop that sits right around some near-term support at $37.50 a share or near $35 a share. One can also buy AGIO 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.