O’Neil’s contribution was insisting that the best-performing stocks share measurable traits before they perform. CANSLIM is the checklist.
- C — Current earnings. Sharp quarterly earnings growth, accelerating.
- A — Annual earnings. Consistent growth over several years.
- N — Something new. New product, new management, new high.
- S — Supply and demand. Smaller float, volume expanding on the up moves.
- L — Leader, not laggard. Buy the strongest name in a strong sector.
- I — Institutional sponsorship. Funds accumulating, but not yet crowded.
- M — Market direction. Most stocks follow the index; don’t fight it.
The part people get wrong
CANSLIM is usually reduced to the cup-with-handle chart pattern. That’s the smallest part of it. The screen is fundamental; the chart only tells you when.
Your own take goes here — how you’d adapt the earnings screens to Indian quarterly reporting.