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*[http://www.investopedia.com/terms/c/canslim.asp CANSLIM definition] - from Investopedia.com
*[http://www.investopedia.com/terms/c/canslim.asp CANSLIM definition] - from Investopedia.com
*[http://www.stator-afm.com/canslim.html CANSLIM information] from Stator-AFM.com


[[Category:Acronyms]]
[[Category:Acronyms]]

Revision as of 08:50, 30 April 2007

CAN SLIM is an acronym for an investment strategy based upon claimed common characteristics shared by best-performing stocks.

The investing mechanism and process

CAN SLIM is a growth stock investment strategy based on a study of 500 of the stock market winners dating back to 1953 in the book How to Make Money in Stocks: A Winning System In Good Times or Bad, 3rd Edition (May 23, 2002) ISBN 0071373616. by William J. O'Neil. This strategy uses both technical analysis and fundamental analysis.

The goal of the strategy is to discover leading stocks before they make major price advances. These pre-advance periods are "buy points" that are emerging from price consolidation areas (or "bases") of at least 7 weeks on weekly price charts.

Components of CAN SLIM

Each letter in CAN SLIM stands for common characteristics which are claimed found in the greatest stock market leaders over the past 50 years:

  • I = Institutional sponsorship. Make sure large mutual fund companies (and other institutions) are investing in your stock - you can ride on their capital. Also, focus on the better performing institutions buying your stock. [51] [52] [53] [54] [55] [56] [57] [58] [59] [60]
  • M = Market trends and market indices. Recognize the cup and handle pattern, as well as other market correction footprints. Know when a stock has peaked out. Also, buy stocks only when the Dow, S&P 500, and Nasdaq are going up. [61] [62] [63] [64] [65] [66] [67] [68] [69] [70]

Cutting losses

The strategy is one that strongly encourages cutting all losses at no more than 7% or 8% below the buy point, with no exceptions, to minimize losses and to preserve gains. It is stated in the book, that buying stocks from solid companies should generally lessen chances of having to cut losses, since a strong company (good current quarterly earnings-per-share, annual growth rate, and other strong fundamentals) will usually shoot up--in bull markets--rather than descend.

O'Neil has stated that the CAN SLIM strategy is not "momentum investing", but that the system identifies companies with strong fundamentals--big sales and earnings increases which is a result of unique new products or services--and encourages buying their stock when they emerge from price consolidation periods (or "bases") and before they advance dramatically in price.

References

  1. ^ William J.O'Neil (2004). The Successful Investor. pp. p. 155. {{cite book}}: |pages= has extra text (help)
  2. ^ Van K. Tharp (2007). Trade Your Way to Financial Freedom (2nd ed). pp. p. 238. {{cite book}}: |pages= has extra text (help)
  3. ^ William J.O'Neil (2002). How to Make Money in Stocks (3rd ed). pp. p. 7. {{cite book}}: |pages= has extra text (help)
  4. ^ John Boik (2004). Lessons from the Greatest Stock Traders of All Time. pp. p. 103. {{cite book}}: |pages= has extra text (help)
  5. ^ Jack D. Schwager (1993). Market Wizards: Interviews with Top Traders. pp. p. 222. {{cite book}}: |pages= has extra text (help)
  6. ^ Jon Leizman (2002). Short Term Trading, Long-Term Profits: The Complete Guide to Short-Term Trading. pp. p. 15. {{cite book}}: |pages= has extra text (help)
  7. ^ Jae K. Shim, Anique Qureshi, Jeffrey Brauchler, and Joel G. Siegel (2000). International Encyclopedia of Technical Analysis. pp. p. 49. {{cite book}}: |pages= has extra text (help)CS1 maint: multiple names: authors list (link)
  8. ^ Ellie Williams (2000). The McGraw-Hill Investor's Desk Reference. pp. p. 422. {{cite book}}: |pages= has extra text (help)
  9. ^ Ellen Hertz (2005). Trading Crowd, The (Cambridge Studies in Social and Cultural Anthropology). pp. p. 171. {{cite book}}: |pages= has extra text (help)
  10. ^ Steven B. Achelis (Oct 2, 2000). Technical Analysis from A to Z, 2nd Edition. pp. p. 91. {{cite book}}: |pages= has extra text (help)
  11. ^ William J.O'Neil (2004). The Successful Investor. pp. p. 156. {{cite book}}: |pages= has extra text (help)
  12. ^ Van K. Tharp (2007). Trade Your Way to Financial Freedom (2nd ed). pp. p. 238. {{cite book}}: |pages= has extra text (help)
  13. ^ William J.O'Neil (2002). How to Make Money in Stocks (3rd ed). pp. p. 16. {{cite book}}: |pages= has extra text (help)
  14. ^ John Boik (2004). Lessons from the Greatest Stock Traders of All Time. pp. p. 104. {{cite book}}: |pages= has extra text (help)
  15. ^ Jack D. Schwager (1993). Market Wizards: Interviews with Top Traders. pp. p. 222. {{cite book}}: |pages= has extra text (help)
  16. ^ Jon Leizman (2002). Short Term Trading, Long-Term Profits: The Complete Guide to Short-Term Trading. pp. p. 15. {{cite book}}: |pages= has extra text (help)
  17. ^ Jae K. Shim, Anique Qureshi, Jeffrey Brauchler, and Joel G. Siegel (2000). International Encyclopedia of Technical Analysis. pp. p. 49. {{cite book}}: |pages= has extra text (help)CS1 maint: multiple names: authors list (link)
  18. ^ Ellie Williams (2000). The McGraw-Hill Investor's Desk Reference. pp. p. 422. {{cite book}}: |pages= has extra text (help)
  19. ^ Ellen Hertz (2005). Trading Crowd, The (Cambridge Studies in Social and Cultural Anthropology). pp. p. 171. {{cite book}}: |pages= has extra text (help)
  20. ^ Steven B. Achelis (Oct 2, 2000). Technical Analysis from A to Z, 2nd Edition. pp. p. 91. {{cite book}}: |pages= has extra text (help)
  21. ^ William J.O'Neil (2004). The Successful Investor. pp. p. 156. {{cite book}}: |pages= has extra text (help)
  22. ^ Van K. Tharp (2007). Trade Your Way to Financial Freedom (2nd ed). pp. p. 238. {{cite book}}: |pages= has extra text (help)
  23. ^ William J.O'Neil (2002). How to Make Money in Stocks (3rd ed). pp. p. 24. {{cite book}}: |pages= has extra text (help)
  24. ^ John Boik (2004). Lessons from the Greatest Stock Traders of All Time. pp. p. 105. {{cite book}}: |pages= has extra text (help)
  25. ^ Jack D. Schwager (1993). Market Wizards: Interviews with Top Traders. pp. p. 222. {{cite book}}: |pages= has extra text (help)
  26. ^ Jon Leizman (2002). Short Term Trading, Long-Term Profits: The Complete Guide to Short-Term Trading. pp. p. 15. {{cite book}}: |pages= has extra text (help)
  27. ^ Jae K. Shim, Anique Qureshi, Jeffrey Brauchler, and Joel G. Siegel (2000). International Encyclopedia of Technical Analysis. pp. p. 49. {{cite book}}: |pages= has extra text (help)CS1 maint: multiple names: authors list (link)
  28. ^ Ellie Williams (2000). The McGraw-Hill Investor's Desk Reference. pp. p. 422. {{cite book}}: |pages= has extra text (help)
  29. ^ Ellen Hertz (2005). Trading Crowd, The (Cambridge Studies in Social and Cultural Anthropology). pp. p. 171. {{cite book}}: |pages= has extra text (help)
  30. ^ Steven B. Achelis (Oct 2, 2000). Technical Analysis from A to Z, 2nd Edition. pp. p. 91. {{cite book}}: |pages= has extra text (help)
  31. ^ William J.O'Neil (2004). The Successful Investor. pp. p. 157. {{cite book}}: |pages= has extra text (help)
  32. ^ William J.O'Neil (2002). How to Make Money in Stocks (3rd ed). pp. p. 32. {{cite book}}: |pages= has extra text (help)
  33. ^ Van K. Tharp (2007). Trade Your Way to Financial Freedom (2nd ed). pp. p. 239. {{cite book}}: |pages= has extra text (help)
  34. ^ John Boik (2004). Lessons from the Greatest Stock Traders of All Time. pp. p. 105. {{cite book}}: |pages= has extra text (help)
  35. ^ Jack D. Schwager (1993). Market Wizards: Interviews with Top Traders. pp. p. 222-223. {{cite book}}: |pages= has extra text (help)
  36. ^ Jon Leizman (2002). Short Term Trading, Long-Term Profits: The Complete Guide to Short-Term Trading. pp. p. 15. {{cite book}}: |pages= has extra text (help)
  37. ^ Jae K. Shim, Anique Qureshi, Jeffrey Brauchler, and Joel G. Siegel (2000). International Encyclopedia of Technical Analysis. pp. p. 49. {{cite book}}: |pages= has extra text (help)CS1 maint: multiple names: authors list (link)
  38. ^ Ellie Williams (2000). The McGraw-Hill Investor's Desk Reference. pp. p. 423. {{cite book}}: |pages= has extra text (help)
  39. ^ Ellen Hertz (2005). Trading Crowd, The (Cambridge Studies in Social and Cultural Anthropology). pp. p. 171. {{cite book}}: |pages= has extra text (help)
  40. ^ Steven B. Achelis (Oct 2, 2000). Technical Analysis from A to Z, 2nd Edition. pp. p. 92. {{cite book}}: |pages= has extra text (help)
  41. ^ William J.O'Neil (2004). The Successful Investor. pp. p. 157. {{cite book}}: |pages= has extra text (help)
  42. ^ William J.O'Neil (2002). How to Make Money in Stocks (3rd ed). pp. p. 37. {{cite book}}: |pages= has extra text (help)
  43. ^ Van K. Tharp (2007). Trade Your Way to Financial Freedom (2nd ed). pp. p. 239. {{cite book}}: |pages= has extra text (help)
  44. ^ John Boik (2004). Lessons from the Greatest Stock Traders of All Time. pp. p. 105. {{cite book}}: |pages= has extra text (help)
  45. ^ Jack D. Schwager (1993). Market Wizards: Interviews with Top Traders. pp. p. 223. {{cite book}}: |pages= has extra text (help)
  46. ^ Jon Leizman (2002). Short Term Trading, Long-Term Profits: The Complete Guide to Short-Term Trading. pp. p. 15. {{cite book}}: |pages= has extra text (help)
  47. ^ Jae K. Shim, Anique Qureshi, Jeffrey Brauchler, and Joel G. Siegel (2000). International Encyclopedia of Technical Analysis. pp. p. 49. {{cite book}}: |pages= has extra text (help)CS1 maint: multiple names: authors list (link)
  48. ^ Ellie Williams (2000). The McGraw-Hill Investor's Desk Reference. pp. p. 423. {{cite book}}: |pages= has extra text (help)
  49. ^ Ellen Hertz (2005). Trading Crowd, The (Cambridge Studies in Social and Cultural Anthropology). pp. p. 171. {{cite book}}: |pages= has extra text (help)
  50. ^ Steven B. Achelis (Oct 2, 2000). Technical Analysis from A to Z, 2nd Edition. pp. p. 92. {{cite book}}: |pages= has extra text (help)
  51. ^ William J.O'Neil (2004). The Successful Investor. pp. p. 158. {{cite book}}: |pages= has extra text (help)
  52. ^ William J.O'Neil (2002). How to Make Money in Stocks (3rd ed). pp. p. 42. {{cite book}}: |pages= has extra text (help)
  53. ^ Van K. Tharp (2007). Trade Your Way to Financial Freedom (2nd ed). pp. p. 239. {{cite book}}: |pages= has extra text (help)
  54. ^ John Boik (2004). Lessons from the Greatest Stock Traders of All Time. pp. p. 107. {{cite book}}: |pages= has extra text (help)
  55. ^ Jack D. Schwager (1993). Market Wizards: Interviews with Top Traders. pp. p. 223. {{cite book}}: |pages= has extra text (help)
  56. ^ Jon Leizman (2002). Short Term Trading, Long-Term Profits: The Complete Guide to Short-Term Trading. pp. p. 15. {{cite book}}: |pages= has extra text (help)
  57. ^ Jae K. Shim, Anique Qureshi, Jeffrey Brauchler, and Joel G. Siegel (2000). International Encyclopedia of Technical Analysis. pp. p. 49. {{cite book}}: |pages= has extra text (help)CS1 maint: multiple names: authors list (link)
  58. ^ Ellie Williams (2000). The McGraw-Hill Investor's Desk Reference. pp. p. 423. {{cite book}}: |pages= has extra text (help)
  59. ^ Ellen Hertz (2005). Trading Crowd, The (Cambridge Studies in Social and Cultural Anthropology). pp. p. 171. {{cite book}}: |pages= has extra text (help)
  60. ^ Steven B. Achelis (Oct 2, 2000). Technical Analysis from A to Z, 2nd Edition. pp. p. 92. {{cite book}}: |pages= has extra text (help)
  61. ^ William J.O'Neil (2004). The Successful Investor. pp. p. 158. {{cite book}}: |pages= has extra text (help)
  62. ^ William J.O'Neil (2002). How to Make Money in Stocks (3rd ed). pp. p. 48. {{cite book}}: |pages= has extra text (help)
  63. ^ Van K. Tharp (2007). Trade Your Way to Financial Freedom (2nd ed). pp. p. 239. {{cite book}}: |pages= has extra text (help)
  64. ^ John Boik (2004). Lessons from the Greatest Stock Traders of All Time. pp. p. 107. {{cite book}}: |pages= has extra text (help)
  65. ^ Jack D. Schwager (1993). Market Wizards: Interviews with Top Traders. pp. p. 223. {{cite book}}: |pages= has extra text (help)
  66. ^ Jon Leizman (2002). Short Term Trading, Long-Term Profits: The Complete Guide to Short-Term Trading. pp. p. 15. {{cite book}}: |pages= has extra text (help)
  67. ^ Jae K. Shim, Anique Qureshi, Jeffrey Brauchler, and Joel G. Siegel (2000). International Encyclopedia of Technical Analysis. pp. p. 49. {{cite book}}: |pages= has extra text (help)CS1 maint: multiple names: authors list (link)
  68. ^ Ellie Williams (2000). The McGraw-Hill Investor's Desk Reference. pp. p. 423. {{cite book}}: |pages= has extra text (help)
  69. ^ Ellen Hertz (2005). Trading Crowd, The (Cambridge Studies in Social and Cultural Anthropology). pp. p. 171. {{cite book}}: |pages= has extra text (help)
  70. ^ Steven B. Achelis (Oct 2, 2000). Technical Analysis from A to Z, 2nd Edition. pp. p. 92. {{cite book}}: |pages= has extra text (help)

Books Referencing CAN SLIM

  • Master Traders: Strategies for Superior Returns from Todays Top Traders (Wiley Trading), by Fari Hamzei and Steve Shobin (Hardcover - Oct 6, 2006)
  • Technical Analysis: The Complete Resource for Financial Market Technicians, by Charles D. Kirkpatrick and Julie R. Dahlquist (Hardcover - Aug 18, 2006)
  • Technical Analysis from A to Z, 2nd Edition, by Steven B. Achelis (Hardcover - Oct 2, 2000)
  • Online Investing Bible (Bible (Wiley)), by Jill S. Gilbert, Thomas S. Gray, Claire Mencke, and Jill Gilbert Welytok (Paperback - Jan 2001)
  • Short Term Trading, Long-Term Profits: The Complete Guide to Short-Term Trading, by Jon Leizman (Hardcover - Feb 15, 2002)
  • The McGraw-Hill Investor's Desk Reference, by Ellie Williams (Hardcover - Oct 19, 2000)
  • International Encyclopedia of Technical Analysis, by Jae K. Shim, Anique Qureshi, Jeffrey Brauchler, and Joel G. Siegel (Hardcover - Feb 2000)
  • Trading Crowd, The (Cambridge Studies in Social and Cultural Anthropology), by Ellen Hertz (Paperback - Aug 31, 2005)
  • The Hedge Fund Edge: Maximum Profit/Minimum Risk Global Trend Trading Strategies (Wiley Trading), by Mark Boucher (Hardcover - Oct 30, 1998)
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