Often, when a leading stock is setting up to breakout of a solid base it is highlighted in CANSLIM.net's Mid-Day Breakouts Report.  The most relevant factors are noted in the report which allows prudent CANSLIM oriented investors to place the issue in their watch list.  After doing any necessary backup research, the investor is prepared to act if and when the stock triggers a technical buy signal (breaks above its pivot point on more than +50% average turnover). In the event the stock fails to trigger a technical buy signal and its price declines then it will simply be removed from the watch list. When you buy, it is also important to have a gameplan on when you will sell to protect your interest, and you can wisely limit losses to less than 7-8% sometimes with some sharp technical analysis.

Energen Corp. (EGN 0.42 or 0.94% to $44.05) rallied without great gusto (only +45% above average volume today) to a new 52-week high close, ending slightly below its newest pivot point.  Long time CANSLIM.net members may recall that this stock first appeared in the March 2003 edition of the CANSLIM.net Monthly News (read here) at $15.21 (split adjusted) as this stock was setting up to breakout of a three month base, and at the time, the major averages soon began a rally with impressive follow through.  This stock climbed a remarkable +191% in the next 31 months.  

After a long nine month consolidation, bottoming on May 24, 2006, the bulls showed up and regained control. Technically, two months later, on July 24, 2006 this stock broke out of a long flat base as it cleared most prior chart resistance and followed through with persistent gains on well above average volume.  It has hardly looked back since, and from its May 24, 2006 low it has quickly climbed nearly +37% and built a steep upward trendline (drawn on the chart below connecting at least three prior lows points).  A violation of that trendline might now be considered as a technical sell signal. During the past few weeks EGN has been moving sideways in a relatively tight trading range which is like a "three weeks tight" type of pattern.  Since the recent highs coincide nicely with its October '05 peak, a breakout to new all-time highs could have even greater significance and lead to a more meaningful rise.  If it rises above its new pivot point on at least a minimum of +50% above average volume, a proper new buy signal may be triggered by such action.  If they rely upon its well-defined upward trendline, and recognize a violation as a technical sell signal, disciplined investors who buy near the pivot point on a proper breakout might not even want to give the stock room to fall as much as 7-8% before electing to sell and protect their interest.

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