Upgrade your membership to see all of the expert analysis we have published on FSLR now!

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.

First Solar Inc. (FSLR +$8.59 or 2.99% to $295.91) was first featured on Tuesday, April 15, 2008 in the CANSLIM.net Mid Day Breakouts Report (read here). It quietly crept to new highs today, whereas most sustained rallies are marked by breakouts above prior chart highs occurring on very heavy volume.  In recent weeks the stock rallied above an earlier chart high with gains on heavy volume, however it was still facing a fair amount of resistance due to overhead supply.  It continued higher to challenge and trade above its prior all-time highs, and strong action in other solar energy related shares is a nice reassurance of group leadership satisfying the L criteria.  An important missing element has been volume, however, as gains marked by heavy volume are the critical proof of heavy institutional buying demand that normally leads to a meaningful advance in a company's shares. Therefore, confirming gains on at least +50% above average volume would help trigger a proper technical buy signal. Patience may allow disciplined investors to accumulate shares before FSLR rises above its max buy price, or on subsequent light volume pullbacks toward support.

View all notes | Alert me of new notes | CANSLIM.net Company Profile