CAN SLIM is a growth stock investment strategy developed by William O’Neill, the co-founder of “Investor Business Dailly” / IBD. He described his strategy in the book How To Make Money In Stocks: A Winning System in Good Times or Bad, 3rd Edition . There are countless examples of this strategy’s success. The goal of the strategy is to discover leading stocks before they make major price advance. There are 7 components of CAN SLIM, which are:
C = Current earning per share. Current earning per share (EPS) must be up no less than 18-20% from the same period last year. For example, a company’s EPS for this year’s January-March must grow minimum 18%-20% from the same three month last year.
A = Annual earning. They should up 25% or more in each of the last three years.
N = New. The company should either be under new management, have new product or service. It also must have new stock price high.
S = Supply and demand. Find company with small outstanding stock.
L = Leader. Find a company that is leading the way or market leader. A stock’s Relative Price Strength Rating should be 80 or higher.
I = Institutioal sponsorship. The company must have institutioanal sponsorship like mutual fund companies.
M = Market trend. You must buy when the trend is up. Like increasing volume, and stock index going up.
Besides the seven characteristic, you also should cut all losses at no more than 7% or 8% below the buy price, to minimize losses.

Tags: A Winning System in Good Times or Bad, CANSLIM, Current earning per share, How To Make Money In Stocks, Investor Business Dailly, Stock Strategy, William O’Neill

There has been many discussion about which strategy is better, fundamental analysis or tehcnical analysis. Technical aproach has been reinforced by trading software which can be used to predict price based on price simulation, where it uses models for each market without regard the underlying economy or fundamental which driven the market. Several recently developed programs help boil down the maze of economic and fundamental information into a form useful by traders who do not have formal training in economics. These programs help track the impact that economic indicators have on price in various markets. Such software gives traders an easy-to-understand link between fundamental data and price. The technical analysis is easier to use than fundamental. But when the market crash on October 1987, traders started to pay attention on the fundamentals, like unemployement figures, trade deficit, unemployment, and commodity supply/demand data . With the combination of two strategy, we will have quite a powerfull strategy.

Technical analysis tells us when the price will likely move, while fundamental analysis tells us what stock is good. By combining the two strategy, we can have a good stock which the price will likely move. A trading plan is needed to win the battle win other investor. You need to know how to choose a good
stock, and how to choose a stock which will move in favor of us shortly.

Tags: Fundamental Analysis, stock software, Stock Strategy, Technical Analysis