Upgrade your membership to see all of the expert analysis we have published on TS now!

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.

Tenaris SA (TS $12.16 or +6.35% to $179.41) is the latest example of how a stock should act after it breaks out.  It was encouraging to see this issue finish yesterday's trading near its highs, then gap higher on massive volume and close near its highs today. This type of action is very "healthy" and typically leads to further price appreciation.  Caution is warranted now because it has quickly exceeded prior chart highs by more than 5%.  Also, its latest quarterly earnings were also under the important +25% threshold, however the year earlier appears to have been influenced by one-time accounting changes - indicated on the annotated DailyGraph(R) by a blue triangle (see green circled area).  This stock has now traded up as much as +245% since it was first featured on Wednesday, February 2nd, 2005 in the CANSLIM.net Mid-Day Breakouts Report (read here). After a some impressive increases, at least twice since it was first featured it went through deeper consolidations, even violating its 50 DMA line.  However, it emerged each time to again break out and race even higher.