The strategy of targeting strong-growth stocks with technical breakout patterns is a classic pairing for investors who want to see both business momentum and market confirmation. The logic is straightforward: strong fundamentals identify companies whose earnings and revenue are growing, while a technical setup helps pinpoint an entry point where the stock is consolidating and preparing to move higher. This method filters out stocks that are merely rising on hype and isolates those where the underlying business performance supports further upside.
Pinterest Inc - Class A (NYSE:PINS) recently surfaced from this type of screening process, earning a ChartMill Growth Rating of 8 out of 10 and a Setup Rating of 7 out of 10. The fundamental picture is strong: the company’s earnings per share have grown at an average annual rate of 32.79% over the past several years, with revenue compounding at 20.06% annually. That is precisely the kind of top-line expansion that defines a genuine growth stock. Importantly, this growth has not come at the cost of financial stability. Pinterest carries no outstanding debt, its current ratio sits at a very healthy 4.23, and its Altman-Z score of 5.95 indicates minimal bankruptcy risk. The full fundamental analysis report also shows a Valuation score of 6 out of 10, with a trailing price-to-earnings ratio of 13.99 and a forward P/E of just 10.03, which is cheap relative to the broader market and the company’s own growth trajectory.
On the technical side, the setup is what makes the stock interesting for a near-term entry. The technical analysis report describes a stock that has been consolidating after a significant downturn. All the key short-term moving averages (20-, 50-, and 100-day SMAs) are rising, and the short-term trend is now positive. The stock is trading near the high of its recent range and faces only one notable resistance area at $34.85, a level that is comfortably above the current price of $23.09. The report also notes a recent Pocket Pivot signal, a volume-based accumulation pattern that often precedes a breakout. With a clearly defined support zone around $22.51 and a suggested entry at $23.93, the setup offers a contained risk of roughly 5.93% per share.
These criteria matter for the strategy because they address the two most common mistakes growth investors make: ignoring the chart and overpaying. The strong growth rating confirms the business is expanding, while the technical setup provides a disciplined entry point. Pinterest is not priced like a high-flying growth stock; its valuation is actually reasonable, which gives it a margin of safety that many faster-growing names lack. The combination of a healthy balance sheet, a cheap valuation, and a clear technical pattern makes it a candidate that fits the framework well.
For investors looking to repeat this approach, the screen that identified Pinterest is designed to find similar opportunities. You can run the same Strong Growth Stock Technical Setups screen to discover more stocks that combine strong growth with a favorable chart setup.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice. All investment decisions should be made based on your own research and risk tolerance.
Read full article here »
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Pinterest (PINS) Shows Strong Growth With an Attractive Technical Breakout Setup
The strategy of targeting strong-growth stocks with technical breakout patterns is a classic pairing for investors who want to see both business momentum and market confirmation. The logic is straightforward: strong fundamentals identify companies whose earnings and revenue are growing, while a technical setup helps pinpoint an entry point where the stock is consolidating and preparing to move higher. This method filters out stocks that are merely rising on hype and isolates those where the underlying business performance supports further upside.
Pinterest Inc - Class A (NYSE:PINS) recently surfaced from this type of screening process, earning a ChartMill Growth Rating of 8 out of 10 and a Setup Rating of 7 out of 10. The fundamental picture is strong: the company’s earnings per share have grown at an average annual rate of 32.79% over the past several years, with revenue compounding at 20.06% annually. That is precisely the kind of top-line expansion that defines a genuine growth stock. Importantly, this growth has not come at the cost of financial stability. Pinterest carries no outstanding debt, its current ratio sits at a very healthy 4.23, and its Altman-Z score of 5.95 indicates minimal bankruptcy risk. The full fundamental analysis report also shows a Valuation score of 6 out of 10, with a trailing price-to-earnings ratio of 13.99 and a forward P/E of just 10.03, which is cheap relative to the broader market and the company’s own growth trajectory.
On the technical side, the setup is what makes the stock interesting for a near-term entry. The technical analysis report describes a stock that has been consolidating after a significant downturn. All the key short-term moving averages (20-, 50-, and 100-day SMAs) are rising, and the short-term trend is now positive. The stock is trading near the high of its recent range and faces only one notable resistance area at $34.85, a level that is comfortably above the current price of $23.09. The report also notes a recent Pocket Pivot signal, a volume-based accumulation pattern that often precedes a breakout. With a clearly defined support zone around $22.51 and a suggested entry at $23.93, the setup offers a contained risk of roughly 5.93% per share.
These criteria matter for the strategy because they address the two most common mistakes growth investors make: ignoring the chart and overpaying. The strong growth rating confirms the business is expanding, while the technical setup provides a disciplined entry point. Pinterest is not priced like a high-flying growth stock; its valuation is actually reasonable, which gives it a margin of safety that many faster-growing names lack. The combination of a healthy balance sheet, a cheap valuation, and a clear technical pattern makes it a candidate that fits the framework well.
For investors looking to repeat this approach, the screen that identified Pinterest is designed to find similar opportunities. You can run the same Strong Growth Stock Technical Setups screen to discover more stocks that combine strong growth with a favorable chart setup.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice. All investment decisions should be made based on your own research and risk tolerance.
Read full article here »