Pegasystems Inc. (PEGA -0.19 or -0.55% to $34.56) was down today on lighter volume as it fell for a 4th consecutive loss. Wider than usual intra-day price swings in the past 2 weeks were noted as signs of uncertainty.  Since its prior appearance in this FSU section on 1/25/10 under the headline "No Buy Signal Since Recently Featured in CANSLIM.net News" it broke out with great volume conviction on 1/27/10 and triggered a technical buy signal, however  2 big losses on heavy volume promptly negated that breakout. Its 50-day moving average line and recent chart lows near $32.50 help define important technical support, where violations would trigger more worrisome sell signals. Negative market conditions (M criteria) are currently an overriding concern prompting great caution, since a follow-through day is still needed to confirm a new rally. 

PEGA was featured in the January 2010 issue of CANSLIM.net News (read here). This high-ranked Computer Software - Financial firm develops, markets, licenses, and supports software to automate various business processes primarily the United States, the United Kingdom, and Europe. It has attracted an increasing number of institutional investors, as the number of top-rated funds owning its shares rose from 43 in Sep '08 to 84 in Dec '09, which is a solid reassurance concerning the investment system's I criteria. PEGA has shown good sales revenues increases and its earnings increases were well above the +25% guideline in the 4 last quarterly comparisons versus the year ago period. The previously noted downturn in annual earnings (the A criteria) from 2003 to 2006 has been followed by a solid turn around and big earnings increases in '07, '08 and '09.

Caution and patience are suggested until the stock manages to build a new base and the broader market (M criteria) proves itself. Meanwhile, 3 out of 4 stocks are likely to struggle since the market is currently in a correction.  Odds are not in favor of new buys working out until a new rally is confirmed with a follow-through-day of gains from at least one of the 3 major market averages.