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 that can ultimately push the stock significantly higher.
A perfect example of this is the move recently in biotechnology and drugs player Rosetta Genomics (ROSG), which I flagged earlier this week in " 8 Stocks Under $10 Skyrocketing Higher." When I saw ROSG trending higher that day, I pointed out that ROSG was close to taking out its 200-day Trading breakouts of $8.26 a share, and volume that day was tracking in extremely strong.
Well, guess what happened? Rosetta Genomics didn't just take out $8.26 a share with volume -- it went on to explode higher in just a few days and hit $23.43 a share. That's a ridiculous move on a stock that simply took out new highs and key overhead resistance levels with high volume. Moves like this happen all the time in the markets, so as traders and investors we constantly have to be scanning the markets for stocks that are setting up to break out and trend higher.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.