Stocks that combine strong technical trends with accelerating earnings growth tend to attract attention from both momentum traders and long-term growth investors. One method for identifying such candidates is the Mark Minervini Trend Template, a systematic framework that screens for stocks in strong uptrends using price, moving averages, and relative strength metrics. When paired with a High Growth Momentum (HGM) rating, the approach adds a fundamental layer, focusing on companies with accelerating sales, earnings, and improving margins. NAND flash controller designer Silicon Motion Technology ADR (NASDAQ:SIMO) is a stock that currently passes both filters.
Meeting the Trend Template Criteria
The Minervini Trend Template sets eight strict technical conditions to confirm a stock is in a healthy Stage 2 uptrend, and SIMO clears every one of them based on the provided data:
- Current Price Above the 150-Day and 200-Day Moving Averages: The stock’s last price of $321.66 sits well above the 150-day SMA ($154.75) and the 200-day SMA ($139.38).
- 150-Day and 200-Day Moving Averages Trending Upwards: Both the 150-day and 200-day SMAs are rising, confirming sustained long-term momentum.
- 50-Day Moving Average Above the 150-Day and 200-Day SMAs: The 50-day SMA ($242.05) is above both longer-term averages, signaling accelerating momentum.
- Price at Least 30% Above Its 52-Week Low: The current price is more than 350% above the 52-week low of $70.12.
- Price Within 25% of Its 52-Week High: The stock is trading at $321.66, just 9.4% below its 52-week high of $355.00, well within the 25% threshold.
- Relative Strength Above 70: The ChartMill Relative Strength score is a stellar 99.03, meaning the stock outperforms 99% of all stocks in the database.
These technical conditions are critical for the Minervini strategy because they ensure the stock is already in a strong uptrend and attracting institutional demand, rather than being a value trap or a laggard waiting for a turnaround.
High Growth Momentum Fundamentals
A stock can have a beautiful chart, but without fundamental support, the rally may lack staying power. The HGM rating focuses on companies showing accelerating earnings, revenue growth, and expanding margins. SIMO’s recent quarterly data fits this profile well:
- EPS Growth Acceleration: Earnings per share grew 163.3% year-over-year in the most recent quarter, accelerating from 38.5% in the prior quarter and 8.7% two quarters ago. This steep acceleration is a core signal in Minervini's SEPA approach.
- Sales Growth Acceleration: Quarterly revenue growth jumped to 105.5% year-over-year, accelerating from 45.7% in the previous quarter. The company has beaten revenue estimates in each of the last four quarters.
- Expanding Profit Margins: The profit margin has improved sequentially from 8.2% two quarters ago to 16.2% last quarter, reaching 17.1% in the most recent period. Margin expansion is a hallmark of high-quality growth companies.
- Upward Estimate Revisions: The average next-year EPS estimate has been revised up by 51.4% over the past three months, and revenue estimates for next year have been raised by 28.1%. Analysts are clearly expecting this momentum to continue.
- Earnings Surprises: The company has beaten EPS estimates in three of the last four quarters, with an average beat of 16%.
These fundamental strengths matter for the strategy because they provide the “catalyst” element Minervini emphasizes: big earnings attract big attention, and upward revisions often precede further price gains.
Technical Report Summary
The ChartMill technical analysis gives SIMO a perfect Technical Rating of 10 out of 10, reflecting its strong long-term and short-term uptrends, outperformance versus 99% of all stocks, and solid liquidity with average daily volume of over 1.1 million shares. The Setup Rating is 3 out of 10, meaning the stock does not currently present a tight consolidation pattern for an immediate entry. The stock has been trading in a wide range ($239.15 - $355.00) over the past month, and volatility has been elevated rather than contracting which is the typical pattern Minervini looks for before entering a position.
For the complete technical analysis including support and resistance levels, you can review the full technical report for SIMO.
Finding More Candidates
SIMO is just one example of what this combined screen can produce. By applying the Minervini Trend Template filters alongside a minimum HGM rating of 4, investors can quickly identify stocks that are both technically strong and fundamentally accelerating.
You can run this same screen and explore the latest results by visiting the High Growth Momentum + Trend Template screen.
Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Always conduct your own research and consider your risk tolerance before making any investment decisions.
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SIMO (NASDAQ:SIMO) Passes Minervini Trend Template and High Growth Momentum Screen
Stocks that combine strong technical trends with accelerating earnings growth tend to attract attention from both momentum traders and long-term growth investors. One method for identifying such candidates is the Mark Minervini Trend Template, a systematic framework that screens for stocks in strong uptrends using price, moving averages, and relative strength metrics. When paired with a High Growth Momentum (HGM) rating, the approach adds a fundamental layer, focusing on companies with accelerating sales, earnings, and improving margins. NAND flash controller designer Silicon Motion Technology ADR (NASDAQ:SIMO) is a stock that currently passes both filters.
Meeting the Trend Template Criteria
The Minervini Trend Template sets eight strict technical conditions to confirm a stock is in a healthy Stage 2 uptrend, and SIMO clears every one of them based on the provided data:
These technical conditions are critical for the Minervini strategy because they ensure the stock is already in a strong uptrend and attracting institutional demand, rather than being a value trap or a laggard waiting for a turnaround.
High Growth Momentum Fundamentals
A stock can have a beautiful chart, but without fundamental support, the rally may lack staying power. The HGM rating focuses on companies showing accelerating earnings, revenue growth, and expanding margins. SIMO’s recent quarterly data fits this profile well:
These fundamental strengths matter for the strategy because they provide the “catalyst” element Minervini emphasizes: big earnings attract big attention, and upward revisions often precede further price gains.
Technical Report Summary
The ChartMill technical analysis gives SIMO a perfect Technical Rating of 10 out of 10, reflecting its strong long-term and short-term uptrends, outperformance versus 99% of all stocks, and solid liquidity with average daily volume of over 1.1 million shares. The Setup Rating is 3 out of 10, meaning the stock does not currently present a tight consolidation pattern for an immediate entry. The stock has been trading in a wide range ($239.15 - $355.00) over the past month, and volatility has been elevated rather than contracting which is the typical pattern Minervini looks for before entering a position.
For the complete technical analysis including support and resistance levels, you can review the full technical report for SIMO.
Finding More Candidates
SIMO is just one example of what this combined screen can produce. By applying the Minervini Trend Template filters alongside a minimum HGM rating of 4, investors can quickly identify stocks that are both technically strong and fundamentally accelerating.
You can run this same screen and explore the latest results by visiting the High Growth Momentum + Trend Template screen.
Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Always conduct your own research and consider your risk tolerance before making any investment decisions.
Read full article here »