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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.

Buckle Inc (BKE +$2.15 or +3.78% to $59.01) rallied with above average volume for another new all-time high today.  It is extended from an ideal buy point now, and its color code was changed to green on 9/03/08 after volume-driven gains lifted it above its max buy level.  It was first featured at $48.75 on Wednesday, April 16, 2008 in the CANSLIM.net Mid Day Breakouts Report with the note reading "Gapped up today and hit a new all-time high with gains backed by above average volume. Rising from a 6 week base above support at its 50 DMA line and prior chart highs in the $43 area" (read here).  

During its consolidation BKE slumped under its 50 DMA line several times, but it found great support above its prior chart highs in the $43 area which were noted earlier.  It encountered some distributional pressure with a few damaging losses in August, but it held well above its 200 DMA line and promptly found support, rallying back with gains on above average volume.

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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

Buckle Inc. (BKE +$0.67 or +1.34% to $50.51) traded up to a new all-time high today with a third consecutive gain on above average volume helping it rise to the high end of a base-on-base type pattern. This is considered very "healthy" action due, especially while the major averages are trading so far off their respective highs. Its prior chart high is the basis for a new pivot point of $51.55 and new max buy level +5% higher at $54.13, which is being noted today while its color code is changed back to yellow.  It is a good candidate for an active watch list, but with confirming action from it and the broader market still needed, patience remains paramount.  BKE sports decent ranks; an Earnings Per Share (EPS) rating of 93, and a Relative Strength (RS) rating of 92.  The number of top-rated funds owning an interest rose from 66 in Sep '07 to 85 in Jun '08, which shows increasing institutional demand (the I criteria).  Concerns would be raised by any weakness leading to a close back under its 50 DMA line.

This stock was first featured on Wednesday, April 16, 2008 in the CANSLIM.net Mid Day Breakouts Report (read here) with a $48.55 pivot point and a $50.98 maximum buy price and the following note as it was triggering a technical buy signal: "Y - Gapped up today and hit a new all-time high with gains backed by above average volume. Rising from a 6 week base above support at its 50 DMA line and prior chart highs in the $43 area. Technically broke out on 2/26/08 with a considerable gain heavy volume. Good annual earnings history (good A criteria) and quarterly earnings increases have been above the +25% guideline in 3 of the past 4 comparisons versus the year earlier. Sales revenues increases have been pretty good, but not meeting the +25% guideline."  Note that in the latest quarter ended April 30, 2008 irt showed a stronger +32% sales revenue increase over the year earlier period, which is a nice acceleration.  As always, disciplined investors know to limit losses per the 7-8% sell rule, and never hold a stock if it falls more than that from their purchase price.

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