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 a powerful breakout recently was Osiris Therapeutics (OSIR). On May 17, I noticed that this stock was starting to move to the upside with strong volume. In my 7 stocks under $10 making big moves article, I highlighted this stock for its bullish price action, and I mentioned the key levels that would trigger a major breakout trade.
Guess what happened? Shares of Osiris Therapeutics triggered that breakout just a few days later, and the stock exploded from around $5.50 to its current price of over $8.50 a share. That is a massive move higher in a very short timeframe. Momentum traders were watching the same levels that I was, so once OSIR took out its overhead resistance at $5.50 the stock just exploded to the upside.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. >>ACTIVE STOCK TRADERS: Check out Stockpickr's special offer for Real Money, headlined by Jim Cramer, now! With that in mind, here's a look at five stocks that are setting up to break out and trade higher from current levels.
Select the service that is right for you!COMPARE ALL SERVICES
- $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
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV