M = Market Direction

The final CANSLIM criterion is market direction. When picking stocks, it is important to recognize what kind of a market you are in, whether it is a bear or a bull. Although O’Neil is not a market timer, he argues that if investors don’t understand market direction, they may end up investing against the trend and thus compromise gains or even lose significantly.

Daily Prices and Volumes

CANSLIM maintains that the best way to keep track of market conditions is to watch the daily volumes and movements of the markets. This component of CANSLIM may require the use of some technical analysis tools, which are designed to help investors/traders discern trends.