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 who can ultimately push the stock significantly higher.
One example of a recent successful breakout trade is independent oil and gas player GMX Resources (GMXR), which I featured in Feb. 26's " 4 Stocks Under $10 Moving Higher" at around $2.16 a share. I mentioned in that piece that shares of GMXR had recently plunged dramatically from $7.50 to $1.80. That move had pushed shares of GMXR into extremely oversold territory, since its relative strength index reading had hit 18.33. I suggested that traders should look for long-biased trades in GMXR as long as it was trading above $1.96 or $1.80, and then once it triggered a breakout above some near-term overhead resistance at $2.50 a share with high volume.
Guess what happened? Shares of GMXR never looked back after I highlighted the stock in my watchlist article, and it has triggered that breakout today with massive upside volume. At last check, shares of GMXR have soared over 75% hitting an intraday day high of $4.36 a share. That's a ridiculous gain in just a few trading sessions for anyone who simply followed the price action and bought the breakout.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 You Need to Sell 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 Major Insider Buying