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. Healthy stocks sometimes trade under their 50 DMA lines briefly, but usually a strong candidate will promptly bounce and repair a 50 DMA violation. When a stock has violated its 50 DMA line and then lingers beneath it, the stock's outlook gets worse and worse as it spends a greater period of time trading under that important short-term average line. Once the 50 DMA line starts sloping downward it should also be acknowledged that the stock has been struggling for a while, and it might be time to reduce exposure and look for places to put that money to work in stronger buy candidates.

Huron Consulting Group Inc. (HURN +$4.05 or +5.30% to $72.36) rallied back above its 50 DMA line with a gain on above average volume, closing -7.1% below its 52-week high of $77.72. The stock was first featured on Thursday, May 31, 2007 in the CANSLIM.net Mid Day Breakouts Report (read here) with a $70.22 pivot point and a $73.73 maximum buy price. The stock made modest progress in the following weeks, but as the major averages entered a steep correction this high-ranked leader also turned tail. Losses backed by above average volume on July 25th and 26th negated its breakout and led to a violation of its 50 DMA line, triggering technical sell signals. HURN continues to sport a very healthy Earnings Per Share (EPS) rating of 99 and a healthy Relative Strength (RS) rating of 94. The company has managed to increase its earnings at a healthy clip in each of the past four quarters, and well above the +25% guideline needed to satisfy the "C" criteria. HURN resides in the Commercial Services group which is currently ranked 22nd of out the 197 Industry Groups covered in the paper, placing it in the much preferred top quartile and satisfying the "L" criteria. Before returning to this high-ranked stock, prudent investors would wait for the major market averages to produce a follow-through-day of gains and meanwhile be watching for this stock build a new base and subsequently trigger a new technical buy signal . As always, it is of the utmost importance to sell a stock if it drops 7-8% below your purchase price.

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(R) 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). 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.

Huron Consulting Group Inc. (HURN +$0.28 or +0.38% to $73.47) rallied to a another new high with a gain on over 1.6 times its average volume, however it ended well off Friday's high with only a negligible gain. The gains it put up this week have offered a very reassuring sign of institutional buying demand (the "I" criteria). HURN was first featured on Thursday, May 31, 2007 in the CANSLIM.net Mid Day Breakouts Report (read here) with a $70.22 pivot point and a $73.73 maximum buy price. Huron Consulting Group sports a very healthy Earnings Per Share (EPS) rating of 98 and a healthy Relative Strength (RS) rating of 95. The company has managed to increase its earnings at an accelerating rate in each of the past four quarters, and well above the +25% guideline needed to satisfy the "C" criteria. HURN resides in the Commercial Services group which is currently ranked 21st of out the 197 Industry Groups covered in the paper, placing it in the much preferred top quartile and satisfying the "L" criteria. On Thursday, HURN jumped above its pivot point with gains and the necessary volume to trigger a proper technical buy signal. It was very encouraging to see HURN follow through on Friday with another gain on higher volume, especially in the face of a much uglier market across the board - a sign of great relative strength! It is important to note, that this stock closed $0.26 cents below its maximum buy price of $73.73, so it is nearly too extended to be a sound buy candidate under the proper guidelines. As always, it is of the utmost importance to sell a stock if it drops 7-8% below your purchase price.

Huron Consulting Group Inc. (HURN $1.85 or +2.63% to $68.52) rallied for a fourth consecutive day and is approaching its pivot point of $70.22. It was first featured today's CANSLIM.net Mid Day Breakouts Report (read here) with a $70.22 pivot point and, 5% above the pivot point, a $73.73 "maximum buy" price. It is perched near all-time highs after building a flat base, however it is important to note that a proper new technical buy signal has not been triggered yet! Therefore, until this stock trades above its pivot point with considerable gains on at least +50% above average volume, patience is required. Without such a reassurance that the stock is being accumulated aggressively by institutional investors (the "I" criteria) its chances of making a sustained advance are looked at as questionable. As always, stocks should be sold if they ever drop 7-8% below your purchase price to prevent the possibility of greater losses which can be damaging both psychologically and financially.

HURN resides in the Diversified - Services group which is currently ranked 25th out the 197 Industry Groups covered in the paper, placing it inside of the preferred top quartile of industry groups and satisfying the "L" criteria. The stock sports a very healthy Earnings Per Share (EPS) rating of 98. Furthermore, the company has managed to increase its earnings by an accelerating rate and above the +25% guideline in each of the past four quarterly comparisons versus the year earlier, satisfying the "C" criteria. Its Relative Strength (RS) rating is also a very respectable 94, well above the 80+ guideline.

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50 DMA Repair Helps Outlook - Monday, August 06, 2007

Company's Shares Show Great Relative Strength - Friday, June 22, 2007

Use CANSLIM.net to Help You Build a Healthy Watchlist - Thursday, May 31, 2007