We started breakoutwatch.com in 2001 to provide the CAN SLIM® investor with rapid access to watchlists of stocks that were in the chart patterns, such as the cup and handle, identified in "How to Make Money in Stocks" by William O'Neil as being the ones with the most potential on breakout. At the time, it was necessary to subscribe to Daily Graphs and browse thousands of charts to find those in the desired patterns. It also required a detailed understanding of the various chart patterns in order to be able to recognize them. Once you found the charts you then had to perform your due diligence to determine which charts met the CAN SLIM® guidelines.
Breakoutwatch.com provided a unique service that combined identification of the CAN SLIM® recommended chart patterns with an evaluation of each stock's technical and fundamental condition against CAN SLIM® principles. We originally called this evaluation our "CANSLIM Evaluator" but were forced to change that term when Data Analysis, Inc. successfully registered CAN SLIM® as a trademark. Recognizing that we were emphasizing technical analysis and adding timing to the methodology, we adopted the CANTATA acronym standing for Current earnings, Annual growth, New highs, Technical Analysis and Timing Assistance.
Since 2003 we have developed a daily history of stocks in the cup-with-handle chart pattern (which appeared to be O'Neil's favorite), and others, that have allowed us to compare the performance of stocks that broke out from the cup-with-handle pattern against the CAN SLIM® principles. This history covers over 60,000 cup-with-handle patterns over seven turbulent years of bull and extreme bear markets and allows us to draw some conclusions about what works and what doesn't. Here are some of the most important areas where we differ with CAN SLIM®.
There are areas where our research has confirmed some CAN SLIM® principles. These are:
Remember, these points of agreement and disagreement apply only to
not to all growth stocks that might be identified by the CAN SLIM®
method. However, since CAN SLIM® also emphasizes the importance of
timing your entry, we think these guidelines, when applied to CAN SLIM®
style stocks will produce better returns. You can verify this for
yourself using our cup-with-handle
The criteria ideal for a strong breakout are:
Further reading from our weekly newsletter:
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