As you continue following any stock, obviously you should be monitoring the price/volume action very closely.  It is also important to keep watch over the company's fundamentals including its latest quarterly earnings results and its Earnings Per Share (EPS) rank in the paper.  Spot a problem or serious disappointment in either area and it may be considered a sell signal. 

LSI Industries Inc. (LYTS $0.32 or 1.90% to $16.50) was first featured on September 6th, 2005 in the CANSLIM.net Mid-Day Breakouts Report (read here) as it was emerging from a 4 month base on massive volume.  Since then, this stock rallied an impressive +27% from its $15.65 pivot point featured in the report.  After a big reversal on October 6th from its highest levels, this stock triggered its first sell signal when it started declining and sliced through its shorter term 50 DMA on November 3rd, 2005.  This action should have prompted concern, even though volume was not particularly heavy on that day or the following day as it continued to sink under the 50 DMA.  It has closed below its shorter term moving average for 6 of the past 8 weeks. While it briefly rallied back above its 50 DMA with above average volume, that encouraging action was short lived.  Losses on above average volume on Thursday, December 15th, 2005 pushed it back under its 50 DMA, then heavier selling behind that led to its Tuesday, December 20th, 2005 low.  In fact, the closing price on December 20th ($15.33) was under its July 20th high close ($15.46), thus the deterioration had completely negated its September 6th, 2005 breakout.  (Editor's note: This selection will be removed from CANSLIM.net's Featured Stocks Page after today.)

Aside from the abovementioned concerns, LYTS showed only a +18% earnings increase in the latest quarterly comparison against its same quarter one year earlier, and its EPS rank has fallen to a mediocre 69.  That is a disappointment as compared to the +25% minimimum quarterly improvement and the 80+ guideline for EPS ranks followed by careful CAN SLIM(TM) investors.  It is presently trading below its 50 DMA while that short term average also is starting to slope downward.  The reason this is a concern is because the healthiest and strongest stocks normally attract institutional support and remain trading above their 50 DMA lines.  The stock is now only -17.3% below its 52-week high, and it recently bounced from just above its 200-day moving average line.  That doesn't seem too bad, and it may look like a potential "double bottom" to some chart readers.  In such a case (double bottom) we would only look at the stock as a buy candidate upon seeing gains on above average volume lifting it above the new pivot point at the center of the "W" right between the two chart lows.  However, all factors considered, there are many better candidates for your investment portfolio that would make better buy candidates.

Another important technical tool that prudent investors have learned to incorporate in their technical analysis is longer term 200-day moving average (DMA) line.  The 200 DMA line plays a pivotal role relative to a stock's price.  If the price of a stock is above its 200-day moving average (DMA) line then odds are that its 200 DMA will act as formidable support.  Conversely, if the price is below its 200 DMA then the moving average can often act as resistance.   While this issue found support at its longer term 200 DMA, note that the past two days' gains have shown suspiciously light volume which indicates little buying conviction.  Further deterioration beyond the recent lows would raise concerns that the stock is getting into more serious trouble.