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.>>5 Dividend Stocks That Want to Pay You More One example of a successful breakout trade I flagged recently was basic materials player Cliffs Natural Resources ( CLF), which I featured in Aug. 5's " 5 Stocks Ready to Break Out" at around $20.50 a share. I mentioned in that piece that shares of CLF recently formed a double bottom chart pattern at $15.50 to $15.41 a share. After bottoming, this stock entered a strong uptrend with shares moving higher $15.41 to over $20 a share. That move was quickly pushing shares of CLF within range of triggering a near-term breakout trade above some key overhead resistance levels at $20.30 to $21.96 a share. Guess what happened? Shares of CLF didn't wait long to trigger that breakout after the stock briefly pulled back to around $20 a share. On Aug. 8, shares of CLF ripped sharply to the upside with heavy volume as the stock started to flirt with those key breakout levels. Then on August 9 shares of CLF exploded to the upside with big volume as the stock trended above $24.50 a share. This stock touched a recent high of $25.95 a share, which represents a powerful gain of just over 25% in a very short timeframe. >>5 Stocks Under $10 Set to Soar 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 Must-See Charts to Trade for Gains With that in mind, here's a look at five stocks that are setting up to break out and trade higher from current levels.
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