WINDERMERE, Fla. (Stockpickr) -- Trading stocks that trigger major breakouts can lead to massive profits. Once a stock trends to a new highs 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.
One example of a successful breakout trade is casino entertainment services provider Caesars Entertainment (CZR) which I featured in Feb. 22's "5 Stocks Ready to Break Out" at around $11.50 a share. I mentioned in that piece that shares of CZR had recently pulled back from $14.25 to around $10.50 a share and the stock was just starting to form a consolidation pattern at around $10.60 to $12 a share. I told readers to watch for shares of CZR to trigger a breakout trade above the highs of its consolidation pattern at $12.10 a share with high volume.
Guess what happened? Shares of CZR didn't wait long to trigger that breakout, since the stock took out $12.10 a share with heavy upside volume within a few trading sessions. Shares of CZR have exploded higher since I wrote that article, with the stock now hitting an intraday high of $17.12 a share. That represents a monster gain for anyone who played the breakout. The probability of success with this trade was high, because CZR cleared $12.10 with strong upside volume. This stock is now approaching extremely overbought levels, since its current relative strength index reading is 84.27.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. >>5 Huge Stocks to Trade for Gains 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. >>5 Stocks With Big Insider Buying
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV