Often, when a leading stock is setting up to breakout of a solid base it is highlighted in CANSLIM.net's Mid-Day Breakouts Report. The most relevant factors are noted in the report which allows prudent investors to place the issue in their watch list. After doing any necessary backup research, the investor is prepared to act if and when the stock triggers a technical buy signal (breaks above its pivot point on more than +50% average turnover). In the event the stock fails to trigger a technical buy signal and its price declines then it will simply be removed from the watch list.

Aecom Technology Corp (ACM +$1.40 or +4.87% to $30.13) was highlighted again in yellow as a noteworthy buy candidate approaching its pivot point in today's CANSLIM.net Mid-Day Breakouts Report (read here). It formed a deep cup-with-handle type pattern over the past 4 months, and its weekly chart shows a streak of 6 consecutive up weeks with above average volume. Its current Up/Down Volume Ratio of 1.6 also indicates institutional accumulation (the I criteria), or a bullish supply/demand scenario for its shares (the S criteria) in the recent period. Strong quarterly and annual earnings history satisfies the C & A criteria. Recent quarterly comparisons showed impressive acceleration in sales and earnings growth. The Building - Heavy Construction group has a history of being seasonal (slower in winter months). ACM was first featured at $28.84 in the 9/17/07 CANSLIM.net Mid-Day BreakOuts Report (read here), and surged nearly +30% afterward, but was dropped from the Featured Stocks list on 11/30/07, shortly after its last appearance with an annotated graph on 11/27/07 under the headline "Disappointing Technical Breakdown After Earnings News" (read here). ACM was discussed in a WBBM 780 AM Radio appearance on Monday, November 26, 2007, when concerns were rising because the market had entered a steep correction, which was noted in the interview at that time (listen to Audio Archive here).

One of the critical characteristics of successful investing is knowing when to sell. Investors are best served when they buy based on the combination of strong fundamentals and technicals, then sell based on the technicals. The reason is because fundamentals often tend to lag a stock's technical condition and come to light later to help explain the technical chart action after the fact.

AECOM Technology Corporation (ACM -$3.85 or -12.42% to $27.14) plunged for a considerable loss on more than 4 times average volume on Tuesday after reporting its latest quarterly earnings. It closed under its July highs and fully negated its September 2007 breakout. The company said that earnings rose +81% from the same period in 2006 and sales rose +23%, seemingly solid growth; however the market felt otherwise. This critical component emphasizes the importance of paying close attention to the stock's reaction to its news, not the just the news itself.

ACM was first featured on Monday, September 17, 2007 in the CANSLIM.net Mid Day Breakouts Report (read here) with a $29.34 pivot point and a $30.81 maximum buy price. At the time, the stock triggered a technical buy signal when it surged above its pivot point on the necessary volume needed to trigger a technical buy signal. Almost immediately, ACM quickly surged nearly +30%. Stocks that rally over +20% within the first few weeks after they are purchased exhibit strong growth potential and should be held a minimum of 8 weeks under the proper guidelines. An important caveat for this rule is that the stock and the overall market do not exhibit strong technical sell signals and break down. After its healthy sprint higher, ACM began pulling back to consolidate its recent move. But instead of finding support near its 50-day moving average (DMA) line, where healthy stocks typically find institutional support, the bears showed up and sent this stock trading below that important threshold. After that critical violation, ACM found support near its pivot point and began wedging higher. However, volume dried up as this stock tried to rally, and then a definitive technical sell signal was triggered when the stock plunged back in its prior base. Keeping losses small is a critical component of successful investing.

A classic example of the success enjoyed by many CANSLIM.net readers usually starts when an investor reads a CANSLIM.net report and buys a featured stock before it has risen above the pivot point by greater than 5%. After a stock breaks out above its pivot point, there is only a +5% window that investors have to purchase the stock under the proper guidelines. Once a stock rises above the "maximum buy price" the risk of a shake out balloons, meaning that even a normal retracement in the stock might force you to employ the 7-8% loss cutting rule. Much can be told by the stock's daily action in the weeks and months that follow a breakout. Typically, a light volume and orderly pullback suggests that the bulls remain in control. However, high volume pullbacks that violate support paint a totally different picture.

AECOM Technology Corporation (ACM +$2.90 or +8.78% to $35.94) surged over +22% in the past 8 trading days since it was first featured in yellow on Monday, September 17, 2007 in the CANSLIM.net Mid Day Breakouts Report (read here) with a $29.34 pivot point and $30.81 maximum buy price. The stock added nearly +7% on Thursday alone as it continued surging into new high territory. ACM triggered a technical buy signal on September 18, 2007, one day after it was first featured, when it vaulted above its $29.34 pivot point with gains on well above the necessary +50% above average volume. The stock spent the next few sessions trading below its maximum buy price as it consolidated its recent move on below average volume. This light volume consolidation gave investors more than enough time to accumulate the stock within the proper parameters before it surged above its $30.81 maximum buy price. AECOM sports a very healthy Earnings Per Share (EPS) rating of 96 and a strong Relative Strength (RS) rating of 94. ACM resides in the Building Heavy- Construction group which is currently ranked 3rd of out the 197 Industry Groups covered in the paper, placing it in the much preferred top quartile (satisfying the L criteria). The prior chart resistance in the $28-29 are is now a key chart support level. As long as this breakout is not negated, odds favor that further highs will follow. Disciplined investors know to avoid chasing extended stocks.

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Construction Firm Still Rebuilding After Deep Correction - Friday, December 26, 2008

Disappointing Technical Breakdown After Earnings News - Tuesday, November 27, 2007

Recent Breakout Extends Its Gains - Thursday, September 27, 2007