Healthy stocks that are within close striking distance of new highs are often great buy candidates for investors to keep on their watch lists, especially when the companies match favorably with all of the investment system's criteria. When a stock is more than -10% off its 52-week high, and if it has violated its 50-day moving average (DMA) line, then the outlook only gets worse and worse as it spends a greater period of time trading deeper under that important short-term average line. By the time a stock's 50 DMA line starts sloping downward it should also be acknowledged that the stock has been struggling for a long while, in which case it might be time to reduce exposure and look for places to put that money to work in stronger buy candidates.
Gartner Inc. (IT +$0.77 or +3.09% to $25.69) enjoyed another new all time high with a gain on above average volume today. A considerable 7/30/08 gain on heavy volume helped this stock trigger a technical buy signal when it vaulted above its $24.90 pivot point on heavy turnover. This stock was first featured on Thursday, August 07, 2008 in the CANSLIM.net Mid Day Breakouts Report (read here) with a $24.90 pivot point, $26.15 max buy point and the following note: "Y - Recent gains with above average volume helped it clear its May highs and approach prior chart resistance in the $27-28 area. This high-ranked leader has shown fairly good annual earning growth (the A criteria) and strong quarterly earnings (the C criteria) history, and sales revenues growth has been steady but under the +25% guideline. Technically broke out from a 10-month cup-with-handle pattern with high volume behind a considerable gain on 7/30/08." IT sports strong ranks; an Earnings Per Share (EPS) rating of 92, and a Relative Strength (RS) rating of 91. Its Return on Equity is reported at a very robust +350%, which is well above the +17% guideline. Gartner closed below its maximum buy price which means that prudent investor can still accumulate this high ranked leader within the proper guidelines. Remember to always limit losses per the 7-8% sell rule, and never hold a stock if it falls more than that from your purchase price.
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