New Buy:(CLR)

I broke the first rule of CAN SLIM investing today, and bought a stock in the midst of a market correction.

This is not something I take lightly or would do in many situations. If my instincts are wrong and this trade doesn't work out, I may never do it again. Even if this trade does work out, I may never do it again. When the market is in a correction, the odds are not good on a long position.

Nonetheless, I took a position in (CLR) for about 30% of my portfolio. If we were in a confirmed rally, I might've put 100% in, perhaps even added some on margin.

This stock is CAN SLIM perfection. I mean that literally - it is the only stock to appear on my strict CAN SLIM screen. The last stock to do so was (RIMM) last fall.

The sales and eps growth are in the triple digits and have been accelerating for the last 3 quarters. ROE is 39%. The number of funds owning the stock has doubled since last September. The debt is high at 26%, however that is a very low number for this group - and this is arguably the number one stock in the number one group.

Oil is one of the few things that have been working this year - and it has been working big. (CLR) has been the leader in the US Oil and Gas Exploration group since shortly after it's breakout the week of March 28th. Since then it's demonstrated technical perfection, more then doubling over 11 weeks before pulling back to the 50 dma over the past 4 weeks. Early this week it broke the 50 dma in the morning, then retook it to close above it and at the high range of trading for the day - a very bullish sign.

When I saw the news last night that (CLR) was getting better than expected results from their second well in the Bakken shale, I thought there was a good chance it would move today - but I didn't expect it to explode like it did. However, I've been watching it long enough that I was ready and got my buy stop order in for $76.20 - it was filled at $76.29.

Because I'm playing around in a weak market I have the stop loss order in at 5% and will move it up as the stock advances (if it advances). I'll reduce my risk as early as possible. I think this stock is worth the chance though, it has the markings of a major winner. The last two times it cleared a short area of consolidation it never came back into it, so I'll watch for that same behavior now.

Of course there is always the chance that crude prices drop tomorrow and this thing comes right back on me. We'll see...

-Geoff