C: Current Earnings - EPS should exceed 25% growth. A: Annual Earnings - Annual ROE should exceed 17%, and the company's earnings should have grown at least 25% over the past three years. N: New Product or Service - Is a new product the catalyst for a higher trading range, and higher P/E expectations?
S: Supply and Demand - Watch if the daily trading volume exceeds the average daily volume. L: Leader or Laggard - Buy the leader of a sector, based on Relative Price Strength Rating. I: Institutional Sponsorship - Are large buyers, such as mutual or hedge funds, invested in the stock? M: Market Indexes - The theory that three out of four stocks follow the basic market pattern for the DOW, NASDAQ or S&P 500 indexes, and to invest in uptrends rather than down to follow market sentiment.