America Movil S.A.B. de C.V. (AMX +$0.88 or +1.33% to $67.10) gapped higher and traded back above its $66.52 pivot point. Concerns have been raised, however, based upon its latest quarterly financial report which showed sales revenues and earnings growth below guidelines (see red annotations). Such lackluster results eliminate it from being considered as a most compelling buy candidate, but the stock didn't necessary trigger a technical sell rule. AMX was featured on Thursday, October 11, 2007 (read here) with the following note: ''Y - Volume is running at an above average pace as it hit new highs from what may be considered a 14-week cup shaped base, yet the chart also includes an 9/18/07 breakout from a double bottom type pattern. High ranks, strong sales, and solid annual earnings history.'' That was the day the major averages negatively reversed from new high territory. The stock has held up well despite the market's distribution days, and its latest unimpressive quarterly report.
America Movil sports a healthy Earnings Per Share (EPS) rating of 97, which could soon be adjusted downward based on the newest earnings data posted. AMX resides in the Telecom- Wirless Services group which is currently ranked 15th of out the 197 Industry Groups list, placing it in the much coveted top quartile needed to satisfy the "L" criteria. Disciplined investors know to always limit losses if a stock drops 7-8% below the purchase price.
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Group action plays a very important role, and experienced investors learn that they can increase their odds of picking a great winner by always focusing their buying efforts in the market's leading groups. The "L" criteria in CAN SLIM(TM) tells us to choose leading companies in leading industry groups, thus it is suggested that investors choose from the top quartile of the 197 Industry Groups (listed in the paper most days on page B4).
America Movil SA de CV (AMX +$0.09 or 0.20% to $44.37) managed to close above its 50-day moving average (DMA) line with very small gain on about average volume today. This stock was featured on Wednesday, January 3, 2007 in the CANSLIM.net Mid Day Breakouts Report (read here) with a $46.25 buy point. This stock sports a healthy Earnings Per Share (EPS) rating of 97 which means that its earnings history is better than 97% of all other publicly traded companies. The stock resides in the Telecom-wireless Services group which is currently ranked 12th out of 197 Industry Groups covered in the paper, placing it in the much coveted top quartile - satisfying the "I" criteria.
There are a few important points that need to be addressed with this issue. First, heretofore, it has failed to close above its pivot point with gains backed by the necessary volume to trigger a proper technical buy signal. At first glance this might be confusing for some investors, because on an intra-day basis it did manage to rise above its pivot point, however it failed to hold on to those gains by the close on January 3rd. Furthermore, the action was quickly negated as this stock spent the next few sessions steadily declining. Third, the bulls failed to show support as it slipped back under its pivot point, further compounding the bearish action. Fourth, it failed to stay above its 50 day moving average (DMA) line.
AMX continues tracing out a long flat base. If it manages to rally and close above its pivot point with gains backed by the necessary volume, then a proper new technical buy signal would be triggered. Investors can usually avoid greater losses when the sell rules are strictly followed, which is why it is equally important to always play good defense whenever any stock falls more than 7-8% below your purchase price.
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