introduction
Welcome back to the CAN SLIM trading blog! Today, I’m excited to share my latest trading insights from February 11th, focusing on how I actively apply the CAN SLIM strategy to navigate and profit in the stock market.
CAN SLIM, a renowned investment strategy, combines technical and fundamental analysis to pinpoint stocks poised for significant growth. Let’s dive into the specifics of my approach and the results it yielded.
Leaping into Action with CAN SLIM
Current Earnings: The Growth Catalyst
The heart of the CAN SLIM strategy beats for companies showing strong, recent earnings growth. This month, I zeroed in on stocks that not only surpassed their previous earnings but also showed potential for more. By prioritizing earnings acceleration, I positioned myself in the path of growth.
New Highs: Identifying Momentum
Another pillar of my strategy is the pursuit of stocks hitting new highs. This approach led me to select shares that not only demonstrated strength but also had the momentum to break out of previous resistance levels, signaling a strong buy.
Strategic Moves and Key Trades
SPXC: A Calculated Leap
On January 23rd, SPXC grabbed my attention. With its price bouncing off the EMA-21 and crossing the $100 mark—a significant psychological level—I saw a golden opportunity. I allocated 9.30% of my portfolio to SPXC, setting a profit target of 20% and a stop loss at 7%, adhering to my risk management rules.
PGTI: Playing the Trends
PGTI’s proximity to the EMA-21 and its upward trend in a leading industry made it an attractive buy on January 31st. Although it wasn’t in the perfect buy zone, the decision to take a smaller position reflected my strategy’s flexibility and risk awareness.
CNM and ESTC: The Speculative Edge
Both CNM and ESTC showcased the traits I look for strong industry ranks and price action near the EMA-21. Despite their high P/E ratios limiting my position size, these trades underscored the importance of speculative plays in my portfolio.
FERG: Doubling Down on Confidence
FERG presented a unique opportunity to increase my stake, thanks to its breakout from a base on February 7th and an added position on February 9th after a 2% profit. This bold move, while slightly increasing my portfolio’s risk profile, was a testament to my confidence in the CAN SLIM method.
That being said, if the position should start to lose value, I would immediately start liquidating my position. It’s important to be confident in your strategy but not in the price movement.
Market Outlook: The Wind at Our Backs
A crucial aspect of my trading strategy is keeping an eye on the overall market indicators, namely SPY and QQQ. Both are performing exceptionally well, staying above all of their key moving averages. This positive trend signals that the overall wind for investing is at our backs, providing a conducive environment for growth-focused strategies like CAN SLIM.
To keep our minds clear, we need to acknowledge that nothing lasts forever. When the market starts to show signs of reversal, we have to take defensive action. Since the indexes are about 3% above EMA-21, that sounds a little bit too optimistic for me.
Reflections and Adjustments
Reflecting on these trades, I recognize the critical role of discipline and adaptability. The CAN SLIM strategy not only guided my decisions but also instilled a robust framework for risk management and profit targeting.
Moving Forward
As I continue on this journey, I’m reminded of the dynamic nature of the stock market. The CAN SLIM strategy remains my guiding light, providing a structured approach to uncovering high-potential stocks. Let us keep learning, stay disciplined, and trade smart!
trade details
SPXC trade details
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- Date: 23 Jan 2024
- Underlying Price: $102.90
- Stop Loss: $96
- Position Size: 9.30%
- Open Trade Reasoning: Bounced from EMA 21 with volume above $100, a psychological level.
PGTI Trade Overview
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- Date: 31 Jan 2024
- Underlying Price: $41.34
- Stop Loss: $38
- Position Size: 5.66%
- Open Trade Reasoning: Near EMA 21 and trending up in a leading industry.
CNM Trade Summary
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- Date: 2 Feb 2024
- Underlying Price: $41.91
- Stop Loss: $39
- Position Size: 5.78%
- Open Trade Reasoning: Less than 3% above EMA 21, RS line trending up.
ESTC Position Information
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- Date: 2 Feb 2024
- Underlying Price: $123.87
- Stop Loss: $115
- Position Size: 5.70%
- Open Trade Reasoning: In the buy zone, RS line up, strong industry rank.
SHOP Trade Data
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- Date: 2 Feb 2024
- Underlying Price: $81.69
- Stop Loss: $75
- Position Size: 3.76%
- Open Trade Reasoning: CAN SLIM stock, bounced from EMA 21, a strong industry.
BHVN Trade Insights
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- Date: 5 Feb 2024
- Underlying Price: $46.81
- Stop Loss: $43
- Position Size: 4.34%
- Open Trade Reasoning: Broke above EMA 21, leading industry stock.
FERG Trades Update
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- First Entry Date: 7 Feb 2024
- Second Entry Date: 9 Feb 2024
- Underlying Price: $194.27 & $199.17
- Stop Loss: $184 & $187
- Open Trade Reasoning: Broke out of a base, speculative position.
APG Trade Brief
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- Date: 9 Feb 2024
- Underlying Price: $35.18
- Stop Loss: $33
- Position Size: 4.76%
- Open Trade Reasoning: Strong stock breaking out of the base.
PATH Position Snapshot
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- Date: 9 Feb 2024
- Underlying Price: $26.30
- Stop Loss: $24
- Position Size: 4.75%
- Open Trade Reasoning: Breakout with strong volume, slightly volatile stock.
