'CANSLIM METHOD'
What is the 'CAN SLIM METHOD'
- A system for selecting stocks created by Mr William J. O'neil
C
- Current Quarterly Earnings
- Earning growth is an important factor to look at when buying stocks.
- Look for stocks with increases in current quarterly earnings of at least 25%
- Current market sentiment
A
- Annual Earnings Growth
- To make sure companies are showing strong long term growth.
- Look for stocks that have grown their earnings at least 25% or more for the past 3 years
- Announcement on corporate activities
N
- Studies of the great stock market winners of the past all had something NEW.
- Always look for companies with new game-changing products, services or new leader
- New all time high
S
- Supply and demand
- As more investors demand a limited supply of shares, a stock's price goes up
- Look for heavy-volume accumulation by institutional investors, particularly from foreign fund
- Share buy back from the company
- Shareholding by CEO, top management
L
- Leader or laggard
- Always look for leading stocks in leading industry groups
- Look for 'the best of the best'
- Leaders in strong industries that are showing superior earnings growth and sales
- Riding 'a winning horse'
I
- Institutional Sponsorship
- Professional investors, like mutual funds and foreign fund account to about 75% of all market activity
- Foreign buying
- Follow the big money
M
- Market direction
- Market trend ; major trend
- Always trade in sync with the market
- Look at the chart ; technical analysis
