Top stocks to invest in according to the CANSLIM approach; do you hold them?

Markets have recently been unpredictable and volatile, which may be ascribed to a range of global and domestic phenomena. In this post, we will use the CANSLIM method to identify the top Nifty 500 stocks.

On Monday, the Nifty 50 traded on an upbeat tone amid solid global trends. However, global recessionary fears have caused markets to become volatile. Nifty 50 concluded Monday’s session at 18,014.6, up 207.8 points or 1.17 per cent. Meanwhile, Dow Jones and Nasdaq 100 futures were trading 0.45 per cent and 0.2 per cent higher, respectively.

When it comes to domestic markets, broader indices outpaced frontline indices. Nifty Mid-Cap 100 index surged 2.72 per cent, while the Nifty Small-Cap 100 index gained 3.81 per cent.

Nifty 50 began to decline at the beginning of the month, draining roughly 5 per cent. Furthermore, it is now trading below its 50-Day Moving Average (DMA) of 18,200. However, the Fibonacci study indicates that it likely took support and climbed back up from the 50 per cent Fibonacci level of 17,800. However, an immediate hurdle of 18,050 awaits Nifty 50. It is impossible to confirm its retracement unless it breaks through this level.

In such a circumstance, it makes perfect sense to invest in fundamentally and technically sound companies. The CANSLIM approach may be useful in this regard. CANSLIM is a growth stock screening approach that combines fundamental and technical research tools. This method was developed by William J. O'Neil, the founder of Investor's Business Daily. The abbreviation is also known as CAN SLIM.

CAN SLIM as an acronym that stands for:

C – current quarterly earnings,

A – annual earnings,

N – new product, service, or management,

S – supply and demand,

L – leaders or laggards,

I – institutional ownership, and

M – market direction.