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 who can ultimately push the stock significantly higher.
One example of a successful breakout trade I flagged recently was biotechnology player CytRx (CYTR), which I featured in May 22's "5 Stocks Under $10 Set to Soar" at around $3.50 a share. I mentioned in that piece that shares of CytRx had been uptrending over the last month and change, with shares moving higher from its low of $2.78 to $3.68 a share. This stock was just starting to spike higher right off its 50-day moving average and it was quickly pushing within range of triggering a big breakout trade above some key resistance levels at $3.68 to $3.86 a share.
Guess what happened? Shares of CytRx triggered that breakout the following week and this stock has not looked back since. Shares of CYTR tagged an intraday high today of $5.46 a share, which represents a massive gain of close to 55% in just a few weeks for anyone who bought shares of CYTR into that breakout. As you can see, trading breakouts can deliver huge profits very quickly once a stock takes out key resistance levels and continues to uptrend.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 Insiders Love Right Now 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.