An important factor is the relationship between an uptrend and a stock's pivot point.  Typically, stocks begin forming an uptrend after rising above their pivot point.  In the event the upward trend is violated, the stock will generally be expected to continue falling until it can retest support.  Initial support is often the 50-day moving average (DMA) line, or its pivot point, whichever is higher.

CH Robinson Worldwide Inc. (CHRW -1.03 or -2.24% to $45.01) closed lower on above average volume on Tuesday. This stock was first featured on Tuesday, December 21, 2004 in the CANSLIM.net Mid Day Breakouts Report (read here) at $27.51 (split adjusted). It struggled for a long time and rather badly before finally coming back into play as it finally made new highs again in May of 2005.

More recently, on Wednesday August 8, 2006 (read here) this stock was featured in the CANSLIM.net's After-Market Report as it was pulling back to ultimately find support above its prior (Nov '05) chart highs of $41-42 area, and above support at its 200 DMA line. The $42-43 area has acted as a formidable support level in recent months, and as long as CHRW does not trade below $42, then odds favor that it will continue tracing out its current 6 month base. If that level is breached, then technically its outlook will be changed significantly, as during the past 6 month a great deal of overhead supply has been created while the stock traded up at higher levels.  Meanwhile, it would take a rise above its 50 DMA line with well above average volume for it to begin looking healthier.  Other stocks, making fresh breakouts to new highs, have the better chance of producing great gains.

Another important factor is the relationship between an uptrend and a stock's pivot point.  Typically, stocks begin forming an uptrend after rising above their pivot point.  In the event the upward trend is violated, the stock will generally be expected to continue falling until it can retest support.  Initial support is often the 50 DMA, or its pivot point, whichever is higher.

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Experienced investors learn to recognize early technical sell signals, and watch for them after a stock has enjoyed a meaningful rise so they can be sure to capture a profit.  Technically, short-term support is expected at an upward trend line, and a violation of that early support often leads to additional downside testinng.  The 50-day moving average (DMA) line and prior chart highs that were earlier resisitance levels are more important support levels.  Violations of those support levels usually should not be tolerated because, once they are breached, the stock is more likely to spend a lot longer time consolidating, or it could get into more serious trouble.   Sometimes, it is best to heed the earlier sell signals and free up your cash for future purchases within the proper guidelines. 

CH Robinson Worldwide has traded up as much as +65% since it was featured near $32 (split adjusted) in the October 12, 2005 CANSLIM.net Mid-Day BreakOuts report (read here). It tallied some initial gains and then went through a consolidation in the December-January period, only to resume a strong uptrend in February.  After a small gap down on Thursday, today's action began with another gap down and ended with the stock's third loss on above average volume in the past five sessions.  The brokerage Stifel Nicolaus downgraded it from hold to sell, triggering a harsh reaction from investors.  Technically, it traded below support of an upward trendline and triggered an early sell signal. Solid support should exist near $45 where prior chart resistance and its 50 DMA line coincide.  A break below that level would be another more worrisome sell signal.