DELAFIELD, Wis. ( 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.
>>4 Red-Flag Stocks to Sell This Summer One example of a successful breakout trade I flagged recently was shipping player Eagle Bulk Shipping ( EGLE), which I featured in Aug. 16's " 5 Stocks Poised for Breakouts" at $3.75 a share. I mentioned in that piece that shares of EGLE had been trending sideways inside of a consolidation pattern over the last few months, with shares moving between $3.10 on the downside and $4.39 on the upside. Shares of EGLE were just starting to bounce off its 50-day moving average and were quickly moving within range of triggering a breakout trade above resistance at $4.08 to $4.39 a share.
Guess what happened? Shares of EGLE started to trigger that breakout the following week as the stock ran up to a high of $4.45 a share. Then the stock pulled back to just below its 50-day moving average at $3.51 a share, but it made a higher low from the previous low of $3.30 a share. Shares of EGLE then exploded to the upside this week with the stock running up to its intraday high today of $5.37 a share. That represents a monster gain of over 40% from that $3.75 level in just a few weeks. Bulls on EGLE should now watch for any move above $5.28 a share with high volume for continued upside.