A very important technical tool that savvy investors have learned to incorporate in their technical analysis is the 50-day moving average (DMA) line.  The 50 DMA line plays a pivotal role relative to a stock's price.  If the price of a stock is above its 50 DMA then odds are that its 50 DMA will act as formidable support.  Conversely, if the price is below its 50 DMA then the moving average acts as resistance.  Healthy stocks sometimes trade under their 50 DMA lines briefly, but usually a strong candidate will promptly bounce and repair a 50 DMA violation. When a stock has violated its 50 DMA line and then lingers beneath it, the stock's outlook gets worse and worse as it spends a greater period of time trading under that important short-term average line. Once the 50 DMA line starts sloping downward it should also be acknowledged that the stock has been struggling for a while, and it might be time to reduce exposure and look for places to put that money to work in stronger buy candidates.

Air Products & Chemicals (APD -$3.15 or -3.22% to $101.00) pulled back today on above average volume, falling near important chart support at its 50 DMA line. It has been encouraging to see the stock find support near its 50 DMA over the past few months, however there have been a few down days with heavier than average volume since its latest 6/05/08 breakout was negated.  Losses on heavy volume are considered distribution days, and several in a short time span have raised concerns.  This stock was first featured on Friday, June 06, 2008 in the CANSLIM.net Mid Day Breakouts Report with a $103.32 pivot point and $108.49 max buy level (read here). Since then, APD has been consolidating just above its 50 DMA line. Going forward, it is very important for the bulls to quell the bearish pressure and defend the 50 DMA line, because a violation could raise more serious concerns. APD remains a strong leader in a strong industry group (good L criteria) which makes it a prime candidate for an active watchlist. If market conditions (the M criteria) improve and the major averages produce a follow through day, odds will then favor it clearing recent highs and continuing higher.

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