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 technology player Uni-Pixel (UNXL), which I featured in May 9's "5 Stocks Ready for Break Out" at $5.50 a share. I mentioned in that piece that shares of Uni-Pixel was starting to trend higher and move within range of triggering a near-term breakout trade above some key overhead resistance levels at $5.55 to $6 a share.
Guess what happened? Shares UNXL triggered that breakout in spades on Thursday with monster upside volume flows. Volume registered 5.78 million shares, which is well above its three-month average action of just 328,205 shares. This stock exploded sharply higher and it tagged an intraday high of $7.21 a share, which represents a monster gain of just over 30%.
As you can see, trading breakouts that trigger with heavy upside volume and rack up huge profits very quickly.
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.