Investors in the stock market must be able to discern the market leaders from those pulling up the rear. Companies that manage to continually lead their industry typically have great returns, and are fundamentally sound. But, for those businesses towards the bottom of the market, investors are lucky to see even a modest return on their investment. So how does the CANSLIM stock strategy separate the leaders from the losers? Investors can identify leaders from losers by looking at the Relative Price Strength (RPS). The relative price strength looks at companies over a given period of time and then ranks them from 1-99. A business with an RPS of 75 indicates that the stock of this company has outperformed 75% of the stocks in the market group. However, CANSLIM stock strategy does not recommend companies with an RPS of less than 70. In fact, a company with an RPS in the high 80's to lower 90's is preferred.
Source: http://www.investorguide.com/igu-article-962-stock-strategies-the-canslim-stock-strategy.html
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