CAN SLIM is Investor Business Daily's acronym for the seven common characteristics all great performing stocks have before they make their biggest gains. The method has grown in popularity, but the market performance over the past 8 years perfectly suits their strategy. Today we take a look at what CAN SLIM is and let you decide if its something you want to add to your arsenal.

So, to start, each letter represents a requirement for the strategy. Here is how the founder originally described the CAN SLIM acronym:

C = Current earnings per share should be up 25% or more and in many cases accelerating in recent quarters. Quarterly sales should also be up 25% or more or accelerating over prior quarters.

A = Annual earnings should be up 25% or more in each of the last three years. Annual return on equity should be 17% or more.

N = A company should have a new product or service that's fueling earnings growth. The stock should be emerging from a proper chart pattern and about to make a new high in price.

S = Supply and demand. Shares outstanding can be large or small, but trading volume should be big as the stock price increases.

L= Leader or laggard? Buy the leading stock in a leading industry. A stock's Relative Price Strength Rating should be 80 or higher.

I = Institutional sponsorship should be increasing. Invest in stocks showing increasing ownership by mutual funds in recent quarters. The Accumulation/Distribution Rating gauges mutual fund activity in a stock.

M = The market indexes, the Dow, S&P 500 and Nasdaq, should be in a confirmed up trend since three out of four stocks follow the market's overall trend

So as you can see, the up trending markets have a huge impact on most of the acronym. Currently there are many names that would fit into this list. But, many feel that the markets are reaching a tipping point, and if that's true then one would need to be very particular about the names they invest in while using this strategy.