5 Stocks Ready for Breakouts

 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.

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One example of a successful breakout trade I flagged recently was biotechnology player Tetraphase Pharmaceuticals (TTPH) , which I featured in Aug. 18's "5 Stocks Triggering Big Breakout Trades" at around $11.60 per share. I mentioned in that piece that shares of Tetraphase Pharmaceuticals were uptrending over the last month and change, with shares moving higher from its low of $10.03 to its recent high of $12.35 a share. That uptrend was starting to push shares of TTPH within range of triggering a big breakout trade above some key near-term overhead resistance levels at $12.04 to $12.35 a share.

Guess what happened? Shares Tetraphase Pharmaceuticals triggered that breakout a few weeks later with decent upside volume flows. Then on Sept. 3 this stock gapped up sharply higher with monster upside volume of 1.82 million shares, which is well above its three-month average action of 276,214 shares. This stock has continued to soar and uptrend with shares of TTPH tagging a recent intraday high of $17.39 a share. That represents a monster gain of right around 50% in a very short time frame for anyone who bought TTPH around the time of my original article. As you can see, trading breakouts that trigger with volume and produce monster gains 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.

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