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CANSLIM.net Profile: CIRCOR International, Inc. engages in the design, manufacture, and distribution of valves and fluid control products primarily in the United States. It operates through Instrumentation and Thermal Fluid Controls Products, and Energy Products segments. sells its products to distributors and end-users through commissioned representatives and direct sales forces, with operations in Canada, Italy, Germany, France, England, the Netherlands, and the People's Republic of China. The company was founded in 1999 and is based in Burlington, Massachusetts. CIR has increased its earnings per share versus the year earlier by an impressive +66%, +88% and +50% in the past three quarterly financial reports (Sept & Dec '06, Mar '07) while sales revenues increased by +38%, +41%, and +27%, respectively.  The company hails from the Machinery - General Industrial group which is presently ranked 17th on the 197 Industry Groups list, which places it in the top quartile of industry groups and satisfies the "L" criteria.  The number of top-rated funds with an ownership interest has increased from 62 funds in Sept '06, up to 68 funds as of March '07, which demonstrates the growing institutional interest (the "I" criteria) in this high-ranked leader. 

What to Look For and What to Look Out For:  The stock has cleared all technical resistance and the path of least resistance may lead to further price gains.  Ideally, this stock would continue rallying on heavier volume over the next few days and weeks, following through with additional gains on higher volume to confirm the breakout.  However, approximately 40% of breakouts are known to retrace and test support near their prior chart highs which were a stubborn chart resistance level.  If the price pulls back with trading volume on the lighter than average side, prudent investors may have an excellent opportunity to accumulate a position in CIR within the proper guidelines, while it is trading below its maximum buy price ($41.16). Keep in mind that CIR has cleared all remaining overhead supply or chart resistance and could quickly become too extended. Undisciplined buys can hurt your investment results.  Caution and a disciplined sell strategy could be required, and concerns would definitely be raised if the stock reverses to a close which negates its breakout above the $38.65 mark which was its best high close prior to the bullish action on Friday, June 14th and gap up gains on heavy volume that followed.  Technically, if that occurs, the stock becomes more likely to spend a lot more time consolidating in its prior base.  It is not wise to hold a struggling stock, leaving it open to get into bigger trouble or a fundamental disappointment. Always limit losses if any stock you buy closes 7-8% below your purchase price.

Technical Analysis: On Friday CIR triggered a technical buy signal as it experienced a breakaway gap from an approximately 6-month base on June 15th, 2007, surging to new highs with considerable gains on very heavy volume. Whenever a stock gaps out of a sound base and vaults to new highs it suggests that there is strong institutional sponsorship. Thus far, the recent volume patterns have been bullish which is best indicated by the fact that volume was light as it recently tested support near its 50-day moving average (DMA) line and then volume expanded over the past few sessions as it raced into new high territory. Note its bullish Up/Down Volume Ratio of 1.5, which is an unbiased sign of accumulation from the institutional crowd. CIR is currently trading below its maximum buy price of $41.16 and, thus, is considered buyable under the proper guidelines. However, buying shares above that level would not be prudent because the odds of getting prematurely stopped out on an ordinary pull back increases markedly.