When screening for stocks that combine explosive growth potential with a clear technical entry point, investors are essentially looking for a double confirmation: the business fundamentals must be accelerating, and the price action must be breaking out of a consolidation phase. The "Strong Growth Stocks with good Technical Setup Ratings" screen is designed to find exactly this intersection. It filters for companies that demonstrate strong revenue and earnings growth, decent profitability, and solid financial health, then overlays a technical analysis filter to identify those with a favorable chart setup—such as a recent consolidation or a pocket pivot signal. This method helps investors avoid the trap of buying into a stock that looks good on paper but is breaking down technically, or one that has a great chart but is built on shaky financials.
Flex Ltd (NASDAQ:FLEX) has emerged from this screen as a strong candidate, scoring a perfect technical rating of 10 out of 10 and a solid fundamental rating of 6 out of 10. Let’s examine why.
Recent Performance & Technical Setup
From a technical perspective, the report is almost uniformly positive. Flex is currently trading near its 52-week high, a strong sign of market leadership, especially with the S&P500’s short-term trend turning positive. The stock has outperformed 98% of all other stocks over the past year, its long-term and short-term trends are both positive, and it is showing relative strength of 98.34. The daily chart volume has spiked significantly in recent days, which is exactly the kind of accumulation you want to see during a strong upward movement.
Crucially, the screen identified a specific setup pattern. The technical analysis report notes a recent "Pocket Pivot" signal—a price/volume accumulation pattern that occurs when a stock moves up on volume higher than the maximum down volume of the previous ten days. With prices consolidating nicely and no significant resistance above the current level, the stock appears ready for a move higher. The generated trading setup suggests an entry near $165.90, a stop loss near $147.59, and a worst-case loss of about 11%.
Fundamental Strength: The Growth Engine
The technical picture is only half the story. The screen’s fundamental filter is designed to ensure that the breakout is backed by a growing business. Flex delivers on this front with a Growth rating of 8 out of 10. Over the past year, the company has grown its Earnings Per Share (EPS) by a strong 24.91%, and revenue has increased by 8.14%. Looking forward, analysts expect this to accelerate dramatically, with EPS growth predicted to average 43.95% annually over the next few years and revenue growth of 22% annually.
This type of earnings and revenue acceleration—especially when it’s expected to pick up speed—is a hallmark of a strong growth stock. The fundamental analysis report also highlights that Flex’s profitability is excellent, with a rating of 8. The Return on Invested Capital (ROIC) of 11.91% is among the best in its industry (Electronic Equipment, Instruments & Components), and its profit margins have been growing nicely. This combination of high profitability and accelerating growth is precisely what investors look for in a situation like this: a company that is not just growing, but doing so efficiently and with pricing power.
Valuation Metrics & Analyst Views
A common concern with growth stocks is that their high valuations are unjustified. Flex trades at a Price/Earnings (P/E) ratio of 48.73, which appears expensive compared to the S&P500’s average P/E of 26.95. However, the PEG ratio (which accounts for earnings growth) suggests a more correct valuation, indicating that the high price is partially compensated for by the company’s rapid future growth prospects. The valuation rating of 4 out of 10 is a caution, but it is offset by the fact that earnings are expected to grow by nearly 44% in the coming years.
Conclusion
The "Strong Growth Stocks with good Technical Setup Ratings" screen helps investors find companies where the business narrative and the chart narrative align. Flex Ltd presents such an alignment: it is a company with accelerating earnings and revenue growth, excellent profitability, and a healthy, if not perfect, balance sheet. Technically, it is in a strong uptrend, consolidating near highs with a fresh pocket pivot signal and no overhead resistance.
For investors looking for further candidates that match this powerful combination of growth fundamentals and technical breakouts, more results can be found via the screen’s dedicated link: View the full list of Strong Growth Stocks with good Technical Setup Ratings.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always conduct your own research and consider your financial situation before making any investment decisions.
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Flex Ltd (NASDAQ:FLEX) scores perfect technical rating with strong growth fundamentals
When screening for stocks that combine explosive growth potential with a clear technical entry point, investors are essentially looking for a double confirmation: the business fundamentals must be accelerating, and the price action must be breaking out of a consolidation phase. The "Strong Growth Stocks with good Technical Setup Ratings" screen is designed to find exactly this intersection. It filters for companies that demonstrate strong revenue and earnings growth, decent profitability, and solid financial health, then overlays a technical analysis filter to identify those with a favorable chart setup—such as a recent consolidation or a pocket pivot signal. This method helps investors avoid the trap of buying into a stock that looks good on paper but is breaking down technically, or one that has a great chart but is built on shaky financials.
Flex Ltd (NASDAQ:FLEX) has emerged from this screen as a strong candidate, scoring a perfect technical rating of 10 out of 10 and a solid fundamental rating of 6 out of 10. Let’s examine why.
Recent Performance & Technical Setup
From a technical perspective, the report is almost uniformly positive. Flex is currently trading near its 52-week high, a strong sign of market leadership, especially with the S&P500’s short-term trend turning positive. The stock has outperformed 98% of all other stocks over the past year, its long-term and short-term trends are both positive, and it is showing relative strength of 98.34. The daily chart volume has spiked significantly in recent days, which is exactly the kind of accumulation you want to see during a strong upward movement.
Crucially, the screen identified a specific setup pattern. The technical analysis report notes a recent "Pocket Pivot" signal—a price/volume accumulation pattern that occurs when a stock moves up on volume higher than the maximum down volume of the previous ten days. With prices consolidating nicely and no significant resistance above the current level, the stock appears ready for a move higher. The generated trading setup suggests an entry near $165.90, a stop loss near $147.59, and a worst-case loss of about 11%.
Fundamental Strength: The Growth Engine
The technical picture is only half the story. The screen’s fundamental filter is designed to ensure that the breakout is backed by a growing business. Flex delivers on this front with a Growth rating of 8 out of 10. Over the past year, the company has grown its Earnings Per Share (EPS) by a strong 24.91%, and revenue has increased by 8.14%. Looking forward, analysts expect this to accelerate dramatically, with EPS growth predicted to average 43.95% annually over the next few years and revenue growth of 22% annually.
This type of earnings and revenue acceleration—especially when it’s expected to pick up speed—is a hallmark of a strong growth stock. The fundamental analysis report also highlights that Flex’s profitability is excellent, with a rating of 8. The Return on Invested Capital (ROIC) of 11.91% is among the best in its industry (Electronic Equipment, Instruments & Components), and its profit margins have been growing nicely. This combination of high profitability and accelerating growth is precisely what investors look for in a situation like this: a company that is not just growing, but doing so efficiently and with pricing power.
Valuation Metrics & Analyst Views
A common concern with growth stocks is that their high valuations are unjustified. Flex trades at a Price/Earnings (P/E) ratio of 48.73, which appears expensive compared to the S&P500’s average P/E of 26.95. However, the PEG ratio (which accounts for earnings growth) suggests a more correct valuation, indicating that the high price is partially compensated for by the company’s rapid future growth prospects. The valuation rating of 4 out of 10 is a caution, but it is offset by the fact that earnings are expected to grow by nearly 44% in the coming years.
Conclusion
The "Strong Growth Stocks with good Technical Setup Ratings" screen helps investors find companies where the business narrative and the chart narrative align. Flex Ltd presents such an alignment: it is a company with accelerating earnings and revenue growth, excellent profitability, and a healthy, if not perfect, balance sheet. Technically, it is in a strong uptrend, consolidating near highs with a fresh pocket pivot signal and no overhead resistance.
For investors looking for further candidates that match this powerful combination of growth fundamentals and technical breakouts, more results can be found via the screen’s dedicated link: View the full list of Strong Growth Stocks with good Technical Setup Ratings.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always conduct your own research and consider your financial situation before making any investment decisions.
Read full article here »