Mark Minervini’s trading strategy is built on a combination of strict technical criteria and fundamental growth. The core idea is to only consider stocks that are already in a strong uptrend (Stage 2) and show accelerating earnings and sales. This approach, known as the SEPA (Specific Entry Point Analysis) system, aims to identify potential market leaders before they make their largest moves. By filtering for stocks that meet both the technical Trend Template and a high-growth momentum rating, investors can quickly narrow the universe to candidates that share the characteristics of historical super-performers.
Meeting the Trend Template Criteria
A stock must pass all eight rules of the Trend Template to be considered a valid candidate. The current data for ChipMOS Technologies Inc-ADR (NASDAQ:IMOS) shows a textbook alignment. The moving averages are in perfect order: the 50-day SMA ($61.63) is above both the 150-day SMA ($46.08) and the 200-day SMA ($40.57), and the 150-day SMA is above the 200-day SMA. All three shorter-term averages are also rising. The current price of $66.00 is above each of these moving averages, confirming a strong and sustained uptrend. Furthermore, the stock is trading 338% above its 52-week low of $15.06, well exceeding the 30% minimum, and is within 25% of its 52-week high of $78.35. With a relative strength ranking of 98.81, it outperforms 98% of all stocks, fulfilling the final and crucial criterion.
High Growth Momentum Fundamentals
While the technical setup is strong, the Minervini strategy also demands accelerating growth. A simple look at trailing twelve-month earnings might be misleading, as it shows a -25.48% decline. However, a quarterly breakdown reveals a strong turnaround. The most recent quarter's earnings per share (EPS) grew 200% year-over-year, following growth of 128% in the prior quarter. This dramatic acceleration is a classic sign of a company turning a corner. Sales growth is also confirming the trend, with the latest quarter showing a 25.4% increase. In addition to the acceleration, analysts are revising their estimates upward, with the next year's EPS estimate being raised by 5.8% over the last three months. This combination of accelerating quarterly earnings, rising sales, and upward revisions is precisely the kind of fundamental picture that precedes major price moves in the Minervini system.
Interpreting the Technical Report
The full technical report provides a detailed view of the stock's current position. The ChartMill Technical Rating of 9 out of 10 confirms the overall health of the long-term uptrend. The Setup Rating is a 7 out of 10, indicating that the stock is in a price consolidation pattern after a strong move, which is a typical entry zone. The report notes that the stock is trading in the middle of its recent range after a pullback, which can present a risk/reward opportunity. A support zone is identified between $63.08 and $64.07, offering a potential area for a stop-loss order. A recent "pocket pivot" signal, where price rises on higher volume, is another positive sign of institutional buying during the consolidation.
For investors looking to find more similar opportunities, a dedicated screen is available that filters for stocks meeting both these high-growth and Minervini Trend Template criteria. You can explore the full list of current candidates here.
Disclaimer: This is not investment advice. The content is for informational and educational purposes only. Please perform your own analysis before making any trading decisions.
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ChipMOS Technologies (NASDAQ:IMOS) Meets Minervini Trend Template for High Growth Breakout Setup
Mark Minervini’s trading strategy is built on a combination of strict technical criteria and fundamental growth. The core idea is to only consider stocks that are already in a strong uptrend (Stage 2) and show accelerating earnings and sales. This approach, known as the SEPA (Specific Entry Point Analysis) system, aims to identify potential market leaders before they make their largest moves. By filtering for stocks that meet both the technical Trend Template and a high-growth momentum rating, investors can quickly narrow the universe to candidates that share the characteristics of historical super-performers.
Meeting the Trend Template Criteria
A stock must pass all eight rules of the Trend Template to be considered a valid candidate. The current data for ChipMOS Technologies Inc-ADR (NASDAQ:IMOS) shows a textbook alignment. The moving averages are in perfect order: the 50-day SMA ($61.63) is above both the 150-day SMA ($46.08) and the 200-day SMA ($40.57), and the 150-day SMA is above the 200-day SMA. All three shorter-term averages are also rising. The current price of $66.00 is above each of these moving averages, confirming a strong and sustained uptrend. Furthermore, the stock is trading 338% above its 52-week low of $15.06, well exceeding the 30% minimum, and is within 25% of its 52-week high of $78.35. With a relative strength ranking of 98.81, it outperforms 98% of all stocks, fulfilling the final and crucial criterion.
High Growth Momentum Fundamentals
While the technical setup is strong, the Minervini strategy also demands accelerating growth. A simple look at trailing twelve-month earnings might be misleading, as it shows a -25.48% decline. However, a quarterly breakdown reveals a strong turnaround. The most recent quarter's earnings per share (EPS) grew 200% year-over-year, following growth of 128% in the prior quarter. This dramatic acceleration is a classic sign of a company turning a corner. Sales growth is also confirming the trend, with the latest quarter showing a 25.4% increase. In addition to the acceleration, analysts are revising their estimates upward, with the next year's EPS estimate being raised by 5.8% over the last three months. This combination of accelerating quarterly earnings, rising sales, and upward revisions is precisely the kind of fundamental picture that precedes major price moves in the Minervini system.
Interpreting the Technical Report
The full technical report provides a detailed view of the stock's current position. The ChartMill Technical Rating of 9 out of 10 confirms the overall health of the long-term uptrend. The Setup Rating is a 7 out of 10, indicating that the stock is in a price consolidation pattern after a strong move, which is a typical entry zone. The report notes that the stock is trading in the middle of its recent range after a pullback, which can present a risk/reward opportunity. A support zone is identified between $63.08 and $64.07, offering a potential area for a stop-loss order. A recent "pocket pivot" signal, where price rises on higher volume, is another positive sign of institutional buying during the consolidation.
For investors looking to find more similar opportunities, a dedicated screen is available that filters for stocks meeting both these high-growth and Minervini Trend Template criteria. You can explore the full list of current candidates here.
Disclaimer: This is not investment advice. The content is for informational and educational purposes only. Please perform your own analysis before making any trading decisions.
Read full article here »