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 on May 30 at $14.30 a share was 3D printing player Voxeljet (VJET). I mentioned in that piece the stock had been consolidating and trending sideways for a few weeks, with shares moving between its 52-week low of $12.85 on the downside and right around $15 on the upside. This stock was starting to bounce higher off its 52-week low and was quickly moving within range of triggering a breakout trade above the upper-end of its recent sideways trading chart pattern.
Guess what happened? Shares Voxeljet triggered that breakout in mid-June with strong upside volume flows. This stock took out the upper-end of that previous range and it spiked back above its 50-day moving average. Shares of VJET have continued to soar higher since triggering that breakout, with the stock tagging an intraday high today of $19.75 a share. That represents a large gain of close to 40% for anyone who bought shares of VJET in anticipation of the breakout. As you can see, trading breakouts that triggering with strong volume and produce large profits in very short timeframes.
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.