Company Profile: Under Armour, Inc. engages in the design, development, marketing, and distribution of branded performance products for men, women, and youth in North America and internationally. The company markets and sells a range of apparel, footwear, and accessories for use in athletics and outdoor activities, as well as for use as casual apparel. It offers long and short sleeve T-shirts, shorts, sweats, socks, performance bags, baseball batting gloves and football gloves, underwear, and other related products; and products for use in outdoor activities, such as hunting, fishing, and mountain sports. The company markets its products as gearlines, which primarily include HeatGear, which is designed to be worn in warm to hot temperatures under equipment or as a single layer; ColdGear that is designed to wick moisture from the body while circulating body heat from hotspots to maintain core body temperature; and AllSeasonGear, which is designed to be worn in changing temperatures. In addition, it offers accessories, such as baseball caps, knit caps, visors, beenies, wraps, headwear, and head and wrist bands. The company sells its products primarily through smaller, independent, and specialty retailers. It also sells its products directly to athletes and other users through its sports marketing group and to consumers through four retail outlet stores in the United States, as well as through its Web site. UARM has increased its earnings versus the year earlier by an impressive +260% +25%, and +78% in the three most recent comparisons for the quarters ended in Mar, Jun, and Sept '06 while the company increase its sales revenues by +51%, +63%, and +48%, respectively.  Return on Equity of 23% is higher than the +17% guideline. The company's management owns a 36% stake in its shares, keeping the directors keenly focused on building shareholder value. The company hails from the Apparel-clothing manufacturing group which is presently ranked 12th on the 197 Industry Groups list, which places it in the top quartile of industry groups and satisfies the "L" vriteria.  The number of top-rated funds with an ownership interest has more than doubled from 34 funds in December '05, up to 75 funds as of September '06, a compelling sign of increasing institutional interest (the "I" criteria). 

What to Look For and What to Look Out For:  Look for this stock to hold onto its gains and enjoy its best close ever.  After it clears all remaining resistance the path of least resistance will be higher and odds will favor further price gains. UARM has cleared nearly all overhead supply or chart resistance, which bodes well for the stock's ability to add to its gains. Ideally, in the days immediately ahead it would follow through with additional gains on high volume to confirm the breakout.  However, if the stock reverses it could negate the breakout, and then odds would favor that it would spend more time quietly consolidating above its 50 day moving average. It is important to note that this stock has encountered resistance several times in the past 8 weeks near $49, and this prior resistance has not been cleared until the stock closes above its old high close with gains backed by heavy volume.  If UARM fails to follow through, the odds of a sustained rise and meaningful gains would be greatly reduced. Always limit losses if any stock you buy closes 7-8% below your purchase price.

Technical Analysis: Today's gap up has bullish implications, as considerable gains on heavy volume are an important component of accumulation - institutional buying activity. After a very healthy run (the stock surged +49% from the beginning of September to the end October) UARM encountered profit taking pressure and endured some distributional action that came in the wake of its latest strong earnings announcement. Despite a few above average volume days which ended in losses, UARM has spent the past 8 weeks generally drifting sideways in a healthy fashion, finding support near prior chart highs ($43.50) and above its 50 DMA line (now $45.43). It is encouraging to see the volume dry up while the stock firmly held onto its hard fought gains during that period. A convincing new technical buy signal would be clinched if it manages to hold on to its early gains today and close at a new all-time high close (above the 10/16/06 close of $48.63).