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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.

Kirby Corp (KEX  -$1.50) or -2.71% to $56.90) gapped down today for a loss on heavy volume, but recovered from its intra-day low to close near its session high. Gaps often give investors a clue what the institutional crowd is doing, so gaps up are generally a bullish sign, and gaps down (like this one) are a bearish sign.  This stock was first featured on Tuesday, March 18, 2008 in the CANSLIM.net Mid Day Breakouts Report (read here) with a $50.26 pivot point and a $52.77 maximum buy price as the stock was soaring into new high territory. Since then, the stock quickly jumped +18%, leaving it well above its maximum buy price. After any stock is properly bought, disciplined investors know that it is of the utmost importance to sell if it drops 7-8% below your purchase price.  Prior chart highs near $50 are now an important support level to watch. Any losses leading to a subsequent breach of its prior chart highs or pivot point would be a definitive technical sell signal. Until that occurs, this stock, in the near term, deserves the bullish benefit of the doubt.

KEX has shown solid earnings increases in recent quarterly comparisons (good C criteria), and it has a good annual earnings history (good A criteria) over the past few years. There is no great resistance remaining due to overhead supply which means the stock could easily continue advancing. Its Earnings Per Share (EPS) is 93 and its Relative Strength (RS) rating stands at a very healthy 98. The number of top-rated funds owning an interest in its shares rose from 110 in Mar '07 to 125 in Dec '07, helping to satisfy the I criteria. The small supply of only 48.9 million shares in its float and light trading volumes could lead dramatic price volatility, especially if the institutional crowd rushes in or out.

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CANSLIM.net Company Profile: Kirby Corporation, through its subsidiaries, provides marine transportation and diesel engine services in the United States. It offers marine transportation services, including inland transportation of petrochemicals, black oil products, refined petroleum products, and agricultural chemicals by tank barges; and offshore transportation of dry-bulk cargoes by barge to petrochemical and refining companies. The company was founded in 1969. Kirby Corporation was formerly known as Kirby Exploration Company, Inc. and changed its name to Kirby Corporation in 1990. The company is based in Houston, Texas. The stock's Composite Rating, which is a combination of all the other readings, stands at a very healthy 97. Meanwhile, the Relative Strength (RS) rating is an impressive 97 and its relative strength line has surged into new high territory. The company's Earnings Per Share (EPS) rating is 94. The company has managed to increase its earnings at a very healthy clip over the past four quarters while sales revenues growth is slightly below the guidelines. The company's annual history has steadily increased for the past few years (good A criteria) which is a healthy sign. Insiders own about 9% of its shares, which provides decent motivation to protect and build shareholder value. Return on Equity of 18% is above the 17% guideline.  From March '07 to Dec '07 the number of top-rated funds rose from 110 to 121, helping satisfy the I criteria.