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.
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An example of a recent successful breakout trade is specialty pharmaceutical player
which I featured in Feb. 01's "
5 Stocks Poised for Breakouts
." I mentioned in that piece that shares of APRI were uptrending strong for the last month, with the stock consistently making higher lows and higher highs, which is bullish technical price action. This stock was also starting to push back above its key technical level at its 200-day moving average of $2.77 a share. That move was quickly pushing APRI within range of triggering a near-term breakout trade once it cleared $2.97 to $3.18 a share with high volume.
Guess what happened? Shares of APRI triggered that breakout the following trading session with heavy upside volume. Since triggering that move, shares of APRI have ripped higher towards its current price of $3.40 a share. That's a big gain for anyone who bought the stock ahead of the move at around $2.70 to $2.75 a share. Shares of APRI still have a chance to trend much higher if it triggers another key breakout trade that I highlighted in the original article.
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.
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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