Kensey Nash Corp (KNSY $34.34) is engaged in cardiovascular medical technology and has significant experience and expertise in the design, development, manufacture and processing of absorbable biomaterials for medical applications.  St. Jude Medical acquired the worldwide license in March of 1999 to develop, manufacture, market and distribute the company's Angio-Seal device that seals and closes femoral artery punctures made during diagnostic and therapeutic cardiovascular catheterizations.  The company is a high ranked leader in the strong Medical- Products group of stocks, a group presently ranked in the top 18% of IBD's 197 Industry Groups.  It has demonstrated impressive sales revenue and earnings growth. The small supply of shares in circulation could lead to significant volatility, so proper discipline on buy and sell timing is particularly important.  Earnings increases over the year earlier were +54%, +38%, +44%, and +65% in the Jun, Sep, Dec '03 and Mar '04 financial reports, respectively.

What to Look For and What to Look Out For: It would be a nice reassurance to see follow-through gains on higher volume, which would give a greater indication of serious institutional buying demand.  Obviously, and reversal and price deterioration under $32 would be cause for concern, while a more serious violation of the May lows or decline under its 50-day moving average line (now $29.19) would be a clearer sell signal.

Technical Analysis:  Back on April 21, 2004, KNSY spiked above its August '03 peak on very high volume.  After further extending the rise it then consolidated back and built a near 6-week base, finding support right at its prior resistance level and staying well above its 50-day moving average line.  Today's big gain lifted it to a new high close on volume 23% above average volume, and although the guideline for volume we normally look for on breakouts is at least 50% above average.  

- Kenneth J. Gruneisen