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Strong Acting Leader In A Leading Industry Group - Thursday, November 16, 2006
Group action plays a very important role, and experienced investors learn that they can increase their odds of picking a great winner by always focusing their buying efforts in the market's leading groups. The "L" criteria in CAN SLIM(TM) tells us to choose leading companies in leading industry groups, thus it is suggested that investors choose from the top quartile of the 197 Industry Groups (listed in the paper most days on page B4).
Gildan Activewear Inc. (GIL +$0.31 or +0.57% to $54.00) added to Wednesday's breakout and technical buy signal with additional gains on average volume. This stock was first featured on Friday, December 2, 2005 in the CANSLIM.net Mid Day Breakouts Report (read here) with a $39.88 pivot point. In the next few months it rallied an impressive +36% before pulling back to consolidate. GIL has spent the past 9 months tracing out a very long base (best viewed on a weekly chart). GIL sports a healthy 91 Earnings Per Share (EPS) rating, and an Wednesday it jumped above its recent high with sufficient volume to trigger a new buy signal. It hails from a very strong group, the Apparel-clothing Mfg industry group which is ranked 8th out of 197 groups tracked in the paper, placing it in the top quartile. Revenue and earnings have shown deceleration in recent quarters, which is not the greatest sign, and its Relative Strength (RS)rating has also fallen to a 79, which is slightly below the 80+ guideline. However, as long as it continues rallying on above average volume and avoids falling back to any close under its 10/13/06 high close of $52.50, odds favor even more gains. Technically, closing back in the prior base would prompt concern. At today's close it was still within 5% of its pivot point, so it remains a worthy buy candidate.
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High Ranked Apparel -Clothing Candidate Setting Up - Tuesday, October 31, 2006
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Gildan Activewear Inc. |
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Ticker Symbol: GIL (NYSE) |
Industry Group: Apparel-Clothing Mfg |
Shares Outstanding: 60,000,000 |
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Price: $51.03 |
Day's Volume: 163,100 |
Shares in Float: 54,700,000 |
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52 Week High: $53.03 3/15/2006 |
50-Day Average Volume: 133,300 |
Up/Down Volume Ratio: 1.2 |
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Pivot Point: $52.80 10/13/2006 high plus .10 |
Pivot Point +5% = Max Buy Price: $54.38 |
Web Address: http://www.gildan.com |
View all notes | Alert me of new notes | CANSLIM.net Company Profile
CANSLIM.net Profile: Gildan Activewear, Inc. engages in the manufacture and marketing of basic activewear for sale principally into the wholesale imprinted activewear market in
What to Look For and What to Look Out For: Look for this issue to eventually breakout of its latest base. Ideally, this stock would breakout above its $52.80 pivot point on at least +50% above average volume to trigger a new technical buy signal. Upon a fresh technical breakout, odds then favor even further price gains. On the other hand, if this stock fails to trigger a technical buy signal investors should wait and watch. There would be support expected near its 50-day moving average (DMA) line, and concerns would be raised if it were to slice through its 50 DMA. Beyond that key support level, the previous chart lows near $47 would be the next level of technical chart support. If damaging losses occur on high volume then the bears would regain control and odds would start to favor that prices may head even lower. As always, follow the sell rule if any stock falls more than 7-8% from your buy point.
Technical Analysis: This stock had steadily rallied from August 2004 to March of 2006, rising four-fold in price. It is currently building the right side of an 8-month long base, during which time it corrected as much as -27.89% from its March 15th, 2006 peak. Very little resistance remains due to overhead supply, and a new technical buy signal would be triggered if it manages to blast above its pivot point with the necessary increase in trading volume to meet the "I" criteria. It is very important to wait for a technical buy signal to be triggered before taking action.Trendline Breach Puts Apparel Group Leader at Test of 50 DMA - Friday, March 24, 2006
A very important technical tool that savvy investors have learned to incorporate in their technical analysis is the 50-day moving average (DMA) line. The 50 DMA line plays a pivotal role relative to a stock's price. If the price of a stock is above its 50 DMA then odds are that its 50 DMA will act as formidable support. Conversely, if the price is below its 50 DMA then the moving average acts as resistance.
Gildan Activewear Inc. (GIL -$1.53 or -2.99% to $49.70) closed lower on above average volume on Friday, and the fact that it violated an upward trend line prompts some concern. This high ranked leader in the Appparel - Clothing Mfg group was featured on Friday, December 2nd, 2005 in the CANSLIM.net Mid Day Breakouts Report (read here) at $40.60 as it was emerging from a solid two-month base on massive volume. After an impressive +30% rally, this stock may simply be pulling back towards its 50 DMA, since it has not spent a lot of time basing. If the bulls fail to offer support at this critical juncture (the 50 DMA) than additional technical sell signals may be triggered. Since making its CANSLIM.net debut, this issue has been a textbook example of a standout CANSLIM.net winner. For the most part it has been steadily rallying on above average volume and pulling back on lighter volume, however there were two heavy distribution days in the stock this week.
