Longstanding readers of this section in the CANSLIM.net After Market Report are well versed on the importance of upward trendlines.  It is also important to note how stocks behave after an upward trendline is violated.  By definition, an upward trendline develops when a stock has steadily appreciated for an extended period of time.  During that period the stock vacillates between the lower and upper boundary of the trendline.  However, once the bears show up and the lower trendline is violated then odds start favoring the possibility of further downside testing. 

Coach Inc. (COH -$0.41 or -1.17% to $34.70) was featured on March 3, 2005 in the CANSLIM.net Mid-Day Breakouts Report (read here) as it was "blasting out of a three month base" at $29.40 (split adjusted).  Since then, however, this stock has been on a rather interesting journey, not always making it easy for CAN SLIM(TM) devotees.  In mid-April it broke under important chart support and fell all the way to its 200-day moving average line (DMA) before bouncing.  Weeks later, it had finally repaired the technial damage, and on June 1st, 2005 it was again featured in yellow at $30.29 in the CANSLIM.net Mid-Day BreakOuts Report (read here).  It appreciated +20% before heavy distributional action marked the start of yet another deep consolidation.  During its July-October slide it first violated an upward trendline, then broke down under its 50 DMA, and then later it briefly violated its 200 DMA and traded under important chart support near $28-29.  

Note that its downward trend was coming to an end right as the broader market averages signaled the start of a new confirmed rally.  A new upward trend was formed from the middle of October through late November.  On November 30th, 2005 this upward trend line was violated with a considerable loss occurring on very heavy volume (twice its average daily volume total).  Since that violation, volume has been light and its pullback rather orderly. However, additional concern is raised by the fact that its November peak only exceeded its August 1st high ($36.42) by pennies before the stock encountered heavy distribution. This gives its chart the look of a great big "double top" pattern that may also be considered as a bearish sign.  The next important level of support is the 50 DMA ($33.15). The stock appears likely to spend more time consolidating, and only a new breakout above the pivot point of $36.94 (its November 28th high plus $0.10) with heavy volume would trigger a new technical buy signal.