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.
One example of a successful breakout trade I flagged recently was biotechnology player Organovo ( ONVO), which I featured in Aug. 16's " 5 Stocks Poised for Breakouts" at $6 a share. I mentioned in that piece that shares of ONVO had started to reverse its downtrend and the stock was beginning to enter a new uptrend. That move was quickly pushing shares of ONVO within range of triggering a near-term breakout trade above some key overhead resistance levels at $6.20 to $6.65 a share.
Guess what happened? Shares of ONVO went on to trigger that breakout in late October with monster upside volume. Prior to breaking out, shares of ONVO were able to hold some key near-term support at around $5 a share, which ended up being the floor for the stock over the last two months and change. Shares of ONVO have now tagged an intraday high today of $13.43 a share, which represents a monster gain of over 100% since the time of my original article. This stock has now entered extremely overbought territory, since its current relative strength index reading is 88.>>5 Big Stocks to Trade for Big Gains: Must-See Charts 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. 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. >>5 Stocks Under $10 Set to Soar With that in mind, here's a look at five stocks that are setting up to break out and trade higher from current levels.