Strayer Education Inc (STRA +$2.69 or +1.22% to $223.23) has recently been consolidating quietly above support at its 50-day moving average (DMA) line. Its outlook would turn bullish if it were to produce a breakout above the $237.70 which is the basis for its new pivot point.  A considerable loss on 1/26/09 with more than twice average raised concerns just days after its last appearance in this section under the headline, "Weekly Graph Of Resilient Company In Leading Group" (read here).  STRA was featured in yellow in the 1/22/09 CANSLIM.net Mid-Day Breakouts Report (read here). Its small supply of shares (the S criteria) has contributed to great volatility while it has been building a choppy base. Its gap up on 1/09/09 was a sign of solid institutional support, helping it rise above its 50 & 200 DMA lines. This high-ranked leader in the Commercial Services - Schools group has proven resilient since weak action prompted it to be dropped from the Featured Stocks list on 1/06/09. STRA was first featured on Tuesday, November 25, 2008 in the CANSLIM.net Mid Day Breakouts Report (read here).

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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 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.  Having identified a high-ranked leader with the proper characteristics, investors should be disciplined to wait and watch for gains on at least +50% above average volume as a confirmation that a breakout is attracting meaningful institutional sponsorship. 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%, or what is called its "max buy" level.

Strayer Education Inc (STRA +$6.16 or +2.75% to $230.47) showed up in today's mid-day screen and it was featured again in yellow in the CANSLIM.net Mid Day Breakouts Report (read here).  Its small supply of shares (the S criteria) has contributed to great volatility while it has been building a choppy base. Its gap up on 1/09/09 was a sign of solid institutional support which has helped it fight back above its 50-day moving average (DMA) line and 200 DMA line. This high-ranked leader (the L criteria) in the Commercial Services - Schools group has proven to be very resilient since weak action prompted it to be dropped from the Featured Stocks list on 1/06/09.  STRA was first featured on Tuesday, November 25, 2008 in the CANSLIM.net Mid Day Breakouts Report (read here).

Do not overlook the fact that the market is still in a correction.  The M criteria, therefore, argues against new buys until a solid follow-through day signals an improvement in market conditions.  A decisive breakout above its pivot point with more than +50% above average volume could then help trigger a technical buy signal worth acting upon.  The weekly graph annotated below is loaded with data which is mostly encouraging.  The stock ended just 4% off its 52-week high, leaving little overhead supply to act as resistance. 

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A very important technical tool that savvy investors have learned to incorporate in their technical analysis is the 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 DMA then odds are that its 200 DMA will act as longer term support.  Conversely, if the price is below its 200 DMA then the moving average acts as resistance.   Obviously, if a technical breakdown or violation takes place on heavy volume it is a more serious concern.  Sometimes quiet violations are repaired quickly, without a lot of additional losses.  However, the key moving averages are always an important line to watch. 

Education Inc (STRA -$15.51 or -7.51% to $190.90) fell considerably today on very heavy volume indicative of institutional (the I criteria) selling pressure.  Based on the poor action it will be dropped from the Featured Stocks list tonight. Its gains above its $235.60 pivot point were noted a month ago, and repeatedly noted as concerns (see the "view all notes" link) for their lack of volume conviction.  An annotated graph under the headline "Volume Indicated Recent Distributional Pressure" trumpeted its previous appearance in the Wednesday, December 24, 2008 CANSLIM.net After Market Report (read here).  It was first featured on Tuesday, November 25, 2008 in the CANSLIM.net Mid Day Breakouts Report (read here). 

STRA recently slumped under its 50 DMA line, but its 200 DMA line had acted as support recently while it encountered worrisome distributional pressure.  Now its prior chart lows in the $161 area are the next important techncial support level. Earnings and sales revenues increases have been steady year after year, and quarter after quarter (good A & C criteria). The "high" dollar amount per share would still be considered a non-factor, yet the small supply (the S criteria) of only 14.2 million shares outstanding can contribute to great volatility in price should the institutional crowd rush in or out. Institutional investors typically show support near a stock's long term average and add to existing holdings if they still believe the company is in healthy shape.  In this case, it looks very unhealthy.

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Volume is a vital component of technical analysis.  Prudent investors that incorporate volume into their stock analysis have often benefited several fold. Ideally, healthy stocks will more often tend to rise on higher volume and pullback on lighter volume.  Volume is a great proxy for institutional sponsorship.  Conversely, high volume declines can be ominous, as this usually signals distribution and further price deterioration are more likely to follow.

Strayer Education Inc (STRA +$0.52 or +0.25% to $210.31) is quietly consolidating near its 50-day moving average (DMA) line. Its weekly chart below shows losses on above average volume, a sign of institutional selling or "distribution" that recently led to a test of support near its longer-term 200 DMA line. Note also that the Sponsorship Rating of D and lower number of top-rated funds owning its shares are additional signs it has come under pressure (see red circled areas).  Its color code was changed to green based on weak action, and it would need to rally back for gains on heavier volume and new high closes above its pivot point for its outlook to improve.

It recently traded above its pivot point, but failed to confirm a solid technical buy signal with adequate volume. Remember that ther guiodelines for buyable breakouts require gains above the pivot point backed by at least +50% above average volume, and preferably more.  Earnings and sales revenues increases have been steady year after year, and quarter after quarter (good A & C criteria). The "high" dollar amount per share would be considered a non-factor, yet the small supply (the S criteria) of only 14.2 million shares outstanding can contribute to great volatility in price should the institutional crowd rush in or out.   This stock was first featured on Tuesday, November 25, 2008 in the CANSLIM.net Mid Day Breakouts Report (read here).

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Strayer Education Inc (STRA -$10.30 or -5.29% to $204.96) suffered another considerable loss as it encountered more distributional pressure and to a close near its 50 DMA line today. As a reassurance concerning the L criteria, this high-ranked leader hails from the Commercial Services - Schools group which is currently ranked 2nd on the 197 Industry Groups list.  It recently traded above its pivot point, however it failed to confirm a solid technical buy signal and concerns were noted (use the "view all notes" link to review if necessary) in prior reports after its sharp loss on 12/01/08.  Losses on heavier volume were an indication of worrisome distributional pressure, raising concerns.  Based on weakness, its color code was changed to green since its last appearance in this Featured Stock update section on Tuesday, November 25, 2008 under the headline "Education Firm Ends At New High Close."

Earnings and sales revenues increases have been steady year after year, and quarter after quarter (good A & C criteria). The "high" dollar amount per share would be considered a non-factor, yet the small supply (the S criteria) of only 14.2 million shares outstanding can contribute to great volatility in price should the institutional crowd rush in or out.  Its 50-day moving average (DMA) line has been noted as a very important support level it has held above since a negative reversal on 11/04/08.  The company was first featured in yellow with a $235.60 pivot point on Tuesday, November 25, 2008 in the CANSLIM.net Mid Day Breakouts Report (read here).

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