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Healthy stocks that are within close striking distance of new highs are often great buy candidates for investors to keep on their watch lists, especially when the companies match favorably with all of the investment system's criteria.  When a stock is more than -10% off its 52-week high, and if it has violated its 50-day moving average (DMA) line, then the outlook only gets worse and worse as it spends a greater period of time trading deeper under that important short-term average line. By the time a stock's 50 DMA line starts sloping downward it should also be acknowledged that the stock has been struggling for a long while, in which case it might be time to reduce exposure and look for places to put that money to work in stronger buy candidates.

Balchem Corp. (BCPC +$0.69 or +2.71% to $26.19) closed higher today on below average volume and ended -1.9% below its 52-week high making it a prime candidate for a strong watchlist. It reappeared in yellow on June 20th, 2008 in CANSLIM.net's Mid-Day Breakouts Report (read here) with a $25.04 pivot point (based on its 4/17/08 high plus ten cents). Since that time it pulled back under its 50 DMA line, then gapped up on 7/01/08 to repair the violation. Gaps up are a bullish indication of strong institutional buying demand (the I criteria).  Market conditions (the M criteria) still argue against new buying efforts until at least one of the major averages produces a follow-through day. BCPC sports strong ranks and has sown solid sales revenues and earnigns increases.  It was dropped from the Featured Stock list after first featured on Friday, December 21, 2007 in the CANSLIM.net Mid Day Breakouts Report (read here).

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