Another important factor is the relationship between an uptrend and a stock's pivot point. Typically, stocks begin forming an uptrend after rising above their pivot point. In the event the upward trend is violated, the stock will generally be expected to continue falling until it can retest support. Initial support is often the 50 DMA, or its pivot point, whichever is higher.

ICON plc (ICLR +$1.48 or +2.39% to $63.40) edged higher on below average volume as this leader continues finding support above its prior chart highs. This stock was first featured on Tuesday, April 24, 2007 in the CANSLIM.net Mid Day Breakouts Report (read here) with a $44.70 pivot point and a $46.94 maximum buy price as it was triggering a technical buy signal. A few months later the stock surged a very healthy +37% before spending the next two months building a new base to consolidate its move. More recently, due to ICLR's healthy action it was re-featured on Friday, December 19, 2007 in that day's CANSLIM.net Mid Day Breakouts Report (read here) with a new $60.77 pivot point and a new $63.81 maximum buy price. The report said, "Y - Triggering a new technical buy signal today after company reaffirms 2007 outlook and gives positive outlook for 2008. Triggered a technical sell signal on 12/13/07 with a considerable loss on above average volume that led to a violation of its 50 DMA line, previously noted as an important support level being tested. Recently broke an upward trendline while retreating from resistance in the $60-61 area..."

Since its 12/19 and 12/21 gains on above average volume the stock has quietly pulled back on light volume. Technically, support near its prior chart highs is an important area now. The stock is currently trading below its maximum buy price which offers disciplined investors a fair opportunity to accumulate shares in this high-ranked leader within guidelines. Disciplined investors remember to always sell a stock if it drops 7-8% below their purchase price.

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.

ICON plc (ICLR +$0.86 or +1.61% to $52.61) edged up to its highest ever close with a gain on below average volume Friday. This stock triggered its latest technical buy signal earlier this week on Tuesday, September 18th, 2007, when it surged into new high territory on above the minimum +50% above average volume threshold. That healthy action allowed this stock to be featured in that day's Mid Day Breakouts Report (read here) with a new $49.75 pivot point and $52.24 maximum buy price. It is encouraging to see the company earn a healthy Earnings Per Share (EPS) rating of 91 and an admirable Relative Strength (RS) rating of 90. The company has managed to increase its earnings by well above the +25% guideline in the past four quarterly comparisons versus the year earlier, easily satisfying the "C" criteria. ICLR resides in the Medical/Dental- services group which is currently ranked 20th of out the 197 Industry Groups covered in the paper, satisfying the "L" criteria.

ICLR was first featured on Tuesday, April 24, 2007 in the CANSLIM.net Mid Day Breakouts Report (read here) with a $44.70 pivot point and a $46.94 maximum buy price. But after only a brief +11% rally, the stock began pulling back and triggering technical sell signals. Instead of building a new base and finding support above its 50 DMA line, however, volume picked up as this stock negated its breakout and violated all remaining areas of support. This action was discussed at length on June 7, 2007 in the CANSLIM.net After Market Report (read here) when its daily coverage was suspended from the CANSLIM.net Featured Stocks List. ICLR is a great example of how valuable the ongoing coverage of leading stocks at CANSLIM.net can be, because it demonstrates the in-depth analysis we offer during both good times and bad. Always limit losses per the 7-8% sell rule, and never hold a stock if it falls more than that much from your purchase price.

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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.

ICON plc (ICLR -$1.17 or -2.65% to $42.92) continued moving lower today after multiple sell signals were triggered by Wednesday's violations of its 50 DMA line, pivot point, and multi-month upward trendline. Normally one would like to see a stock find support at or above any of these important inflection points, or a prompt repair of any breach, however that did not occur. Volume was above average for a third consecutive losing session as the stock sliced fell back under prior chart high and closed back in its prior base, totally negating its April 24th breakout. This weakness is a sign that institutional investors were unloading shares instead of propping the stock up with supportive buying efforts.

ICLR was first featured on Tuesday, April 24, 2007 in the CANSLIM.net Mid Day Breakouts Report (read here) with a $44.70 pivot point and a $46.94 maximum buy price. It was very encouraging to see volume spike above the +50% above average volume guideline behind that day's gains, sufficient to trigger a proper technical buy signal. It had demonstrated signs of strong institutional buying demand (the 'I" criteria) as it blasted higher and actually closed at a new high close on above average turnover. But after only a brief +11% rally, the stock began pulling back. Also, note that it had failed to produce any gains on above average volume in more than 5 weeks. Instead of building a new base and finding support above its 50 DMA line, however, volume picked up as this stock negated its breakout and violated all remaining areas of support. As always, a stock should be sold any time it falls -7-8% below its purchase price. As of tonight, ICLR will be dropped from the CANSLIM.net Featured Stocks List and daily coverage will discontinue.

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.

ICON plc (ICLR +$1.64 or +3.73% to $45.64) gapped up as it broke out of a 3-month base after reporting stellar first quarter results. This stock was first featured on Tuesday, April 24, 2007 in the CANSLIM.net Mid Day Breakouts Report (read here) with a $44.70 pivot point and a $46.94 maximum buy price. It was very encouraging to see volume spike above the +50% above average volume guideline behind the day's gains, sufficient to trigger a proper technical buy signal. Technically, this stock demonstrated signs of strong institutional buying demand (the 'I" criteria) as it blasted higher and actually closed at a new high close on above average turnover.

The "C" criteria was easily satisfied in this high-ranked leader which has managed to increase its earnings dramatically in the recent quarterly comparisons versus the year ago comparison. In ICLR's most recent quarter ended March 31, 2006 the company earned $0.42 cents per share, compared to $0.27 in the first quarter of 2006, which is an impressive +56% increase - nicely higher than the +25% guideline. Meanwhile, its sales revenues have continued growing at a very strong pace, which is also positive. The stock sports a healthy Earnings Per Share (EPS) rating of a 93. ICLR resides in the "Medical - Dental Services" group which is currently ranked 35th out of the 197 Industry Groups covered in the paper, placing it in the much preferred top quartile and satisfying the "L" criteria. Now that this stock has traded above its pivot point it is important not to "chase" this stock above its maximum buy price. Any reversal and close back under prior chart highs, dropping it back into its prior base, would be a technical sell signal to watch out for. As always, a stock should be sold any time it falls -7-8% below its purchase price.

Following 200 DMA Breach Losses Were Quickly Magnified - Wednesday, November 05, 2008

Encouraging Rally Above 50 Day Moving Average Line - Wednesday, September 10, 2008

Healthy Action Continues Above 50-Day Moving Average - Wednesday, July 09, 2008

Upward Trendline Being Tested Now - Wednesday, March 19, 2008

Disappointing Negative Reversal After Chance At New High Close - Wednesday, February 13, 2008

Healthy Consolidation After Recent Breakout - Thursday, January 03, 2008

Fresh Breakout Ends At New High Close - Friday, September 21, 2007

Damaging Losses Trigger Technical Sell Signals - Thursday, June 07, 2007

Stock Gaps Up Out of a Decent Base - Tuesday, April 24, 2007