CAN SLIM is an acronym developed by the American investor William O'Neil, intended to represent the seven characteristics that top-performing stocks often share before making their biggest price gains.
The method was named the top-performing investment strategy from 1998-2009 by the American Association of Individual Investors.
The objective of the strategy is to discover leading stocks before they make major price advances.
[6] It is stated in the book, that buying stocks of solid companies should generally lessen chances of having to cut losses, since a strong company (good current quarterly earnings-per-share growth, annual growth rate, and other strong fundamentals) will usually shoot up—in bull markets—rather than descend.
[8] O'Neil has stated that the CANSLIM 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.