When building a stock selection strategy, blending technical strength with fundamental momentum can be an effective way to find companies poised for continued growth. The approach rooted in the Mark Minervini playbook—often referred to as the "Trend Template"—is designed to identify stocks that are not only in a clear technical uptrend but also backed by accelerating earnings and sales growth.

By running a screen that combines the Minervini Trend Template with a High Growth Momentum (HGM) rating, we aim to find securities that offer both a strong chart setup and a solid growth story. This dual-filter method ensures we aren’t just chasing price action but are also looking at the underlying business performance that often drives sustained moves. Below, we take a closer look at ADEIA INC (NASDAQ:ADEA) to see how it stacks up under this lens.

Why ADEA Fits the Minervini Trend Template

The Mark Minervini Trend Template is a set of technical criteria designed to confirm a stock is in a strong, sustainable uptrend. ADEA checks nearly every box, which is essential for this method because it filters out stocks that are still in consolidation or a downtrend.

• Current Price vs. Moving Averages: ADEA is trading at $31.81, significantly above its 50-day SMA ($29.66), 150-day SMA ($22.06), and 200-day SMA ($20.59). This confirms the stock is in a healthy uptrend.
• Moving Average Slope: The 200-day SMA is rising (from $20.50 to $20.59), and the 150-day SMA is also trending upward. This indicates the trend has long-term support.
• Alignment of Averages: The 50-day SMA sits comfortably above both the 150-day and 200-day SMAs, which is a classic sign of bullish momentum.
• 52-Week Range: The current price is 180% above the 52-week low ($11.61) and only 7.4% below the 52-week high ($34.34). This meets the requirement of being at least 30% above the low and within 25% of the high.
• Relative Strength: ADEA has a Relative Strength (RS) rating of 94.42, meaning it outperforms more than 94% of all stocks in the database—a key filter for Minervini’s focus on market leaders.

The short-term trend is neutral, but the long-term trend is positive, which aligns with the idea that strong stocks often pause before continuing higher. The stock is currently trading in the middle of its recent range ($25.71 - $33.61), but the tight consolidation with decreasing volatility is exactly the kind of pattern that precedes a potential breakout.

High Growth Momentum: Earnings and Sales Acceleration

For High Growth investors, the technicals must be supported by strong and accelerating fundamentals. ADEA’s recent earnings and sales data tell a convincing story that fits this criteria.

• Earnings Growth: The trailing twelve-month (TTM) EPS is $1.77, showing 38.3% growth over the past year. More importantly, the last two quarters saw accelerating growth:
  • Q1 vs. prior year Q1: +83.0%
  • Q2 vs. prior year Q2: +46.2% This acceleration is a hallmark of the Minervini approach, which focuses on companies with rising quarterly earnings momentum.
• Revenue Growth: TTM revenue is up 21.1%, and the last quarter saw 19.5% sales growth year-over-year. The previous quarter was even stronger at +53.3%. Consistent revenue expansion is a critical driver for high-growth companies.
• Earnings Surprises: ADEA has beaten EPS estimates in 3 out of the last 4 quarters, with an average beat of 5.3% . This suggests the company is consistently outperforming expectations—a trait Minervini looks for as a catalyst.
• Profit Margins: The latest quarterly profit margin is 21.7% , up significantly from the previous quarter (10.1% in Q-2). Improving margins are a sign of operational efficiency and pricing capability.
• Forward Growth: Analysts expect 25.7% EPS growth and 15.1% revenue growth in the next quarter, while estimates for the next fiscal year have been revised upward by 0.5% in the last three months.

These fundamentals provide the "why" behind the price action. Without this earnings and sales acceleration, the technical uptrend might not be sustainable. This is why the combination of the Trend Template and High Growth Momentum is so effective.

What the Chartmill Technical Report Says

The Chartmill Technical Report gives ADEA a Technical Rating of 9 out of 10 and a Setup Quality Score of 7 out of 10. The report highlights that the stock has been a steady performer with strong relative strength.

Key takeaways from the report:

• Support Zones: A clear support area exists between $31.38 and $31.80, formed by multiple trend lines and moving averages.
• Setup Pattern: The report notes that volatility has decreased and prices have consolidated, creating a low-risk entry point. The suggested entry is $33.62 (a buy stop above the 10-day high), with a stop loss near $31.37.
• Performance: ADEA has outperformed 94% of all stocks on a yearly basis and 91% of stocks in the Software industry.

You can view the full detailed analysis here: ADEA Technical Analysis Report

Finding More Candidates

This screen is just one example of how to combine technical strength with high growth fundamentals. It filters for stocks that meet the Minervini Trend Template and have a High Growth Momentum rating of at least 4, ensuring you are looking at companies with both trend and quality.

For a live list of current stocks that pass these criteria, you can run the screen yourself by following this link: [High Growth Momentum + Trend Template Screener](https://www.chartmill.com/stock/stock-screener?sid=718&f=sm50v_a_sm150v,sm50v_a_sm200v,sl_crs_70_X,sm200v_r,sm150v_a_sm200v,v1_50b100,cu_a_sm50v,cu_a_sm150v,cu_a_sm200v,sl_ratingHgm_6_X,exch_us&v=3&s=ta&sd=DESC&cpl=2&bc=true&nw=1&pam=1&pm=1&set=1&uc=7054723&dc=14111810&o1=3&op1=200,16711680&o2=3&op2=50,255&o3=1&o4=89&op4=40,1,10536676&cf=%28h%3E%3D%28wh520.75%29%29,%28cu%3E%3D%28wl521.3%29%29> to discover more potential opportunities.

Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Trading stocks involves risk, and past performance is not indicative of future results. Always conduct your own research and consider your risk tolerance before making any trading decisions.

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