Buy These 5 Stocks Now for Big Breakout Gains

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.

Breakout candidates are something that I tweet about on a daily basis. These are also the exact type of stocks that I love to trade and alert to my subscribers in real-time. I frequently flag 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 possibly trade higher from current levels.

Yirendai

One financial player that's starting to trend within range of triggering a big breakout trade is Yirendai  (YRD) , which operates as an online consumer finance marketplace that connects borrowers and investors primarily in China. This stock has been red hot with the bulls over the last three months, with shares exploding higher by 80.7%.

If you take a look at the chart for Yirendai, you'll notice that this stock recently formed a double bottom chart pattern at $10.33 to $10.30 a share. Following that bottom, shares of Yirendai have started to spike higher and move back above its 20-day moving average of $11.78 a share. That move has now started to push this stock within range of triggering a major breakout trade above some key near-term overhead resistance levels.

Traders should now look for long-biased trades in Yirendai if it manages to break out above some near-term overhead resistance levels at $13 to $13.09 a share and then above more resistance at $13.50 a share to its all-time high of $14.87 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 541,298 shares. If that breakout triggers soon, then this stock will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that move are $17 to $20 a share.

Traders can look to buy Yirendai off weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support at $11.67 a share or around those recent double bottom support levels. One can also buy this stock off strength once it starts to clear those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

BP Prudhoe Bay Royalty Trust

An energy player that's starting to move within range of triggering a near-term breakout trade is BP Prudhoe Bay Royalty Trust  (BPT) , which operates as a grantor trust in the U.S. This stock has been smashed lower by the sellers over the last six months, with shares off big by 57.4%.

If you take a glance at the chart for BP Prudhoe Bay Royalty Trust, you'll notice that this stock has been consolidating and trending sideways over the last few weeks, with shares moving between $14.73 a share on the downside and $17. a share on the upside. Shares of BP Prudhoe Bay Royalty Trust spiked higher on Friday right above its 20-day moving average of $15.10 a share. That spike is now quickly pushing this stock within range of triggering a near-term breakout trade above the upper-end of its recent sideways trending chart pattern.

Traders should now look for long-biased trade in BP Prudhoe Bay Royalty Trust if it manages to break out above some near-term overhead resistance levels at $16.75 to $16.96 a share to some more key resistance at $17 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 519,539 shares. If that breakout hits soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $18.41 to its 50-day moving average of $18.78, or even $20 to $22 a share.

Traders can look to buy BP Prudhoe Bay Royalty Trust off weakness to anticipate that breakout and simply use a stop that sits right around its 20-day moving average of $15.10 a share or near its recent range low of $14.73 a share. One could also buy this stock off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Performance Sports Group

A specialty retailer that's starting to spike within range of triggering a big breakout trade is Performance Sports Group  (PSG) , which designs, manufactures and distributes performance sports equipment, related apparel, and accessories for ice hockey, roller hockey, lacrosse, baseball, and softball primarily in the U.S., Canada, and Europe. This stock has been smacked by the bears over the last six months, with shares dropping sharply by 68.5%.

If you take a glance at the chart Performance Sports Group, you'll notice that this stock has been uptrending strong over the last month, with shares moving higher off its low of $2.92 a share to its recent high of $4 a share. During that uptrend, this stock has been making mostly higher lows and higher highs, which is bullish technical price action. This uptrend has now pushed shares of Performance Sports Group within range of triggering of triggering a big breakout trade above some key near-term overhead resistance levels.

Traders should now look for long-biased trades in Performance Sports Group if it manages to break out above some near-term overhead resistance levels at $3.79 to $4 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 1.40 million shares. If that breakout materializes soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $4.50 to its 50-day moving average of $4.52, or even its gap-down-day high of $5.21 a share.

Traders can look to buy Performance Sports Group off weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support levels at $3.50 to $3.36 a share. One can also buy this stock off strength once it starts to move above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Cyberark Software

A software player that's starting to trend within range of triggering a near-term breakout trade is Cyberark Software  (CYBR) , which develops, markets, and sells software-based IT security solutions that protect organizations from cyber attacks in the U.S. and internationally. This stock has been hit notably by the sellers over the last six months, with shares off by 15.4%.

If you take a glance at the chart for Cyberark Software, you'll notice that this stock bounced notably higher on Friday back above both its 50-day moving average of $39.47 a share and its 20-day moving average of $40.06 a share. That bounce is now quickly pushing shares of Cyberark Software within range of triggering a near-term breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in Cyberark Software if it manages to break out above Friday's intraday high of $40.93 a share and then above more key resistance at $41.30 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 773,260 shares. If that breakout fires off soon, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $43.30 to $45.16, or even its 200-day moving average of $45.60 to $47 a share.

Traders can look to buy Cyberark Software off weakness to anticipate that breakout and simply use a stop that sits right below Friday's intraday low of $39.03 a share. One can also buy this stock off strength once it starts to trend above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Cellectar Biosciences

My final breakout trading prospect is biopharmaceutical player Cellectar Biosciences  (CLRB) , which develops compounds for the treatment, diagnosis, and imaging of cancer. This stock has been annihilated by the sellers over the last three months, with shares down huge by 70.7%.

If you look at the chart for Cellectar Biosciences, you'll notice that this stock has been downtrending badly over the last three months, with shares falling sharply lower off its high of $7.40 a share to its new 52-week low of $1.61 a share hit on Friday. During that downtrend, shares of Cellectar Biosciences have been making mostly lower highs and lower lows, which is bearish technical price action. That move has also pushed this stock into extremely oversold territory, since its current relative strength index reading is 25.8. Oversold can always get more oversold, but it's also an area where a stock can make a powerful bounce higher from.

Traders should now look for long-biased trades in Cellectar Biosciences if it manages to break out above some key near-term overhead resistance levels at $1.89 to $2 a share and then above more resistance at $2.08 a share with volume that hits near or above its three-month average action of 68,187 shares. If that breakout develops soon, then this stock will set up to re-test or possibly take out its next major overhead resistance level at its gap-down-day high of $2.25 a share. Any high-volume move above $2.25 will then give this stock a chance to re-fill some of its previous gap-down-day zone that started near $4 a share.

Traders can look to buy shares of Cellectar Biosciences off weakness to anticipate that breakout and simply use a stop that sits a comfortable percentage from its new 52-week low of $1.61 a share. One can also buy this stock off strength once it starts to move above those breakout levels with volume and then simply use a stop that sits a conformable percentage from your entry point.

Disclosure: This article is commentary by an independent contributor. At the time of publication, the author was long CLRB.

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