CANSLIM.net Company Profile: DealerTrack Holdings, Inc., through its subsidiaries, provides software, network, and data solutions to the automotive retail industry in the United States. It offers pre-sales marketing and prospecting products, which include Chrome Carbook, PC Carbook, and Carbook Fleet edition that provide automotive specification and pricing information; and WebsitePlus that enables visitors to a dealer's Web site to submit credit application data online. The company is headquartered in Lake Success, New York. This leader hails from the strong Computer-Software Enterprise group which is ranked 20th out of the 197 Industry Groups covered in the newspaper, placing it in the much preferred top quartile needed to satsify the "L" criteria. The number of top-rated mutual funds owning this company's shares rose from 71 in September '06 to 119 in Jun '07, which easily satisfies encouraging news concerning the "I" criteria.  Insiders own about 21% of its shares, which provides motivation to protect and build shareholder value.  Its small supply of outstanding shares could lead to dramatic price volatility, especially if the institutional crowd rushes in or out. Strong earnings and sales revenues increases have easily topped the +25% guideline, and the stock has very high 96 Earnings Per Share and 92 Relative Strengh (RS) ranks.

What to Look For and What to Look Out For: If this stock manages to blast above its new pivot point of $40.84 with gains backed by at least +50% above average volume then a new technical buy signal will be triggered. Any violation of its upward trendline would prompt concern and a breach of recent chart lows could trigger technical sell signals. Disciplined investors always limit losses per the 7-8% sell rule, and never hold a stock if it falls more than that much from their purchase price. Keep in mind that satisfying the "M" criteria calls for being sure the major averages first produce a proper follow-through day before initiating any new positions.

Technical Analysis: The weekly chart for TRAK features several up weeks on heavier than average volume versus no down weeks on heavy volume recently, which is a very bullish sign.  It faces minimal resistance due to overhead supply from earlier highs.  Since it hit a high of $40.74 on July 12th, for the past 6 weeks TRAK has been basing, recently finding support near its 50-day moving average (DMA) line.  Its 200-day moving average (DMA) line near $32 is too far below to be helpful support for disciplined investors who always limit losses per the 7-8% sell rule.