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 great example of a successful breakout trade that I highlighted recently was AuthenTec (AUTH). On Tuesday, I highlighted shares of AUTH in "4 Stocks Under $10 Making Big Moves," because the stock was moving notably higher with above average volume. Shares of AUTH were also starting to take out some previous overhead resistance levels at $5.19 a share.
Guess what happened? Just this morning, news has hit the wires that Apple (AAPL) has purchased AuthenTec for $350 million, or $8 a share in cash, which represents a 58% premium over Thursday's closing price. Traders didn't even have to wait long to get paid in spades off the breakout action in AUTH.
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