Classic Breakout Continues Higher
Monday, September 19, 2005 CANSLIM.net
Apple Computers Inc (AAPL +$1.43 or +2.79% to $43.49) is a perfect example of what a healthy breakout typically looks like. After rallying over +200% in 2004 this issue spent the first half of 2005 building a new base and consolidating. After tracing out 6-month base this issue was ready to continue marching higher. On August 12th, 2005 it blasted above its pivot point ($45.54) on massive volume. From that point it was not a straight up run, as the stock retraced like the majority of healthy breakouts, finding good support above the prior resistance levels and continuing to trade above its pivot point. So, after its initial breakout, this issue spent the next several sessions moving lower on below average volume, then it continued advancing on higher volume. It fell only 12 cents on September 7th, its one day of losses that occurred on much higher than average volume.
On Wednesday, August 24th the stock was highlighted in CANSLIM.net's Mid-Day BreakOuts Report (read here) as it was consolidating above its pivot point. Shortly thereafter, on September 6th, the stock gapped higher for more gains on above average volume. It has hardly looked back since, and as long as the pattern continues to demonstrate advances on higher volume and losses on generally lighter volume, the odds favor that even higher prices will follow.
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