Elephants

A term that refers to institutions with large amounts of capital that can make large trades. Due to their large size of their investments, elephants can have a large impact on the price of the asset.

When many elephants move into a security, it may lead to a strong uptrend in the price of the security. Such a phenomenon was seen in commodities in 2008, when many funds invested their funds in commodities due to the fall in the stock market, driving prices to record highs again and again.

The “I” in CANSLIM warns of a stock having too much institutional ownership. This can lead to a crash in the price of a stock if the elephants decide to get out of it at once.