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5 Stocks Ready to Break Out

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, it's free to find new buyers and momentum players that can ultimately push it significantly higher.

One example of a recent successful breakout trade is biotechnology and drugs stock Cyclacel Pharmaceuticals (CYCC), which I highlighted in Sept. 11's "4 Biotech Stocks Under $10 Making Big Moves." The stock was starting to trend above its 200-day moving average at $3.97, and it was quickly pushing within range of triggering a major breakout trade above some near-term overhead resistance levels at $4.06 to $4.20 a share.

>>5 Stocks Under $10 Set to Soar

Guess what happened? Within about a week, shares of CYCC went on to trigger that breakout trade with heavy upside volume. The stock went on to skyrocket and trade from a low of $3.88 to its recent high hit on this Monday at $7.93 a share. That's a monster gain of close to 100% in a very short timeframe. This is a perfect example of why you have to be creating a watch list of breakout stock candidates every day. When these stocks trigger, they have the propensity for making monster moves higher.

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 Stocks With Big Insider Buying

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.

 

Stock quotes in this article: COCO, CHTP, MCP, KEG, MGM, CYCC 

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