Quanex Corp. (NX -$3.40 or -5.30% to $60.80) moved lower on above average volume on Wednesday, dragged lower by the major averages.  Not only did this issue move lower on above average volume on Wednesday but it also negated its breakout by falling back into its prior base and closing nine cents below its 50 DMA. 

This type of action reminds us of the importance of adhering to a strict sell discipline while investing.  This stock was first featured on 9/30/2005 in the CANSLIM.net Mid Day Breakouts Report with a pivot point of $64.05. After an extremely brief rally it promptly reversed and gave back its prior gains.  The maximum loss that should be tolerated would be adhering to the 7-8% stop loss rule.  It is important to note that this is a maximum loss guideline, yet there is nothing wrong with limiting the damage to a smaller percentage by moving your stop loss higher.  In fact, this can often be a prudent thing to do in an overall declining market.