MADISON, 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 powerful breakout trade I flagged recently was rare earth metals player Molycorp ( MCP), which I featured in April 23's " 4 Under-$10 Stocks Making Big Moves" at around $5.40 a share. I mentioned in that piece that shares of MCP were starting to trend higher right off its 52-week low of $4.70 with decent upside volume. That move was starting to push shares of MCP within range of triggering a near-term breakout trade above some resistance levels at $5.83 to its 50-day at $5.93 a share. >>5 Stocks Under $10 Set to Soar Guess what happened? Shares of MCP flirted with that breakout for a number of trading sessions following my piece, with the stock hitting intraday highs at $6.07 and $6.06 a share. Then shares of MCP pulled back to right around its 50-day moving average before triggering that breakout again today in spades. Shares of MCP have exploded higher here by over 20%, and the stock has hit an intraday high of $6.98 a share. That's a ridiculous gain in a very short timeframe for anyone who played the breakout. That move now has MCP flirting with another key breakout since the stock is testing its next major overhead resistance levels at $6.55 to $6.61 a share. Traders should continue to look for more upside in the near future if MCP can close above those levels today. >>5 Huge Stocks to Trade: 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. 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 the Smart Money Hates -- But Should You?
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