Combining High Growth Momentum with Strong Technical Setups
The ChartMill High Growth Momentum Rating (HGM) evaluates a stock based on earnings and sales growth, acceleration, profit margin trends, earnings surprises, and analyst revisions. It is designed to identify stocks that exhibit the kind of explosive earnings momentum typically seen in CANSLIM and Minervini-style strategies. However, a high fundamental score alone is not enough – the stock also needs a sound technical foundation and a well-defined entry point. By screening for securities that combine an HGM rating above 4 with a Technical Rating (TA) above 7 and a Setup Rating above 7, we aim to uncover names that possess both strong earnings momentum and a favorable chart pattern for a potential breakout.
One stock that passes this combined screen is nLIGHT, Inc. (NASDAQ:LASR). The company designs and manufactures high-performance semiconductor and fiber lasers for applications in aerospace & defense, industrial processing, and microfabrication.
Strong Earnings Momentum Behind the Score
nLIGHT earns a High Growth Momentum rating of 6 out of 10, which is a solid score considering the demanding criteria of the rating. The underlying numbers are what drive that score, and they paint a clear picture of accelerating earnings strength:
- EPS growth (TTM): +192.3% year-over-year
- EPS growth (last quarter vs. same quarter last year): +600%
- EPS growth (previous quarter vs. same quarter last year): +146.7%
- EPS growth (two quarters ago vs. same quarter last year): +200%
- EPS growth (next quarter estimate vs. same quarter last year): +139.7%
- Revenue growth (TTM): +40.9% year-over-year
- Revenue growth (last quarter vs. same quarter last year): +55.2%
- Free Cash Flow growth (1 year): +51.7%
- Earnings surprises: Beat estimates in all of the last 4 quarters, with an average beat of 161%
- Analyst revisions: The average next-year EPS estimate has been raised by 66.3% in the last three months; revenue estimates are up 8.0% in the same period.
This combination of triple-digit EPS growth, accelerating sales, consistent earnings beats, and upward analyst revisions is exactly what the High Growth Momentum Rating is designed to capture. The company has moved from a loss-making position two years ago to a trailing EPS of $0.48, and the forward estimates suggest that momentum is continuing. For growth investors, these are the kind of fundamental pressures that often precede sustained price appreciation.
Technical Strength and a Clear Setup
Beyond the fundamentals, nLIGHT’s technical profile is also strong. The ChartMill Technical Report assigns it a Technical Rating of 9 out of 10 and a Setup Rating of 7 out of 10. You can examine the full details in the technical analysis report.
Key technical observations include:
- Trend: Both the short-term and long-term trends are positive. The stock is currently trading in the upper part of its 52???week range and has outperformed 98% of all stocks over the past year.
- Relative Strength: The Relative Strength rating is 98.43, placing it among the market’s top performers.
- Consolidation pattern: After a strong run, the stock has been trading in a tighter range in recent weeks. Volatility is decreasing, and the price is hovering near a resistance zone between $74.62 and $75.23.
- Support levels: Two support zones have been identified – one between $64.97 and $65.69, and a deeper one between $60.61 and $61.37.
The Setup Rating of 7 indicates that the stock is forming a decent base. The automated trade suggestion in the technical report proposes an entry above the resistance zone at $75.24 with a stop-loss below the support at $64.96. While no automated suggestion should be taken as a trade recommendation, it does illustrate that the chart is showing a measurable consolidation pattern – a classic setup for a potential breakout.
For high growth momentum investors, a stock that combines explosive earnings growth with a healthy technical trend and a defined base is exactly the kind of candidate worth watching. The strong relative strength confirms that the market is already rewarding the company’s fundamental progress.
Finding More High-Growth Breakout Candidates
The screen that identified nLIGHT is designed to surface stocks that pair a high HGM rating with strong technical and setup scores. This approach narrows the field to names that have both the earnings momentum and the chart pattern that historically precede sustained moves. To explore the current list of stocks meeting these criteria, you can run the High Growth Momentum Breakout Setups Screen and adjust the parameters to your own preferences.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always conduct your own research and consider your risk tolerance before making any trading decisions.
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nLIGHT (NASDAQ:LASR): A High Growth Momentum Stock with a Strong Breakout Setup
Combining High Growth Momentum with Strong Technical Setups
The ChartMill High Growth Momentum Rating (HGM) evaluates a stock based on earnings and sales growth, acceleration, profit margin trends, earnings surprises, and analyst revisions. It is designed to identify stocks that exhibit the kind of explosive earnings momentum typically seen in CANSLIM and Minervini-style strategies. However, a high fundamental score alone is not enough – the stock also needs a sound technical foundation and a well-defined entry point. By screening for securities that combine an HGM rating above 4 with a Technical Rating (TA) above 7 and a Setup Rating above 7, we aim to uncover names that possess both strong earnings momentum and a favorable chart pattern for a potential breakout.
One stock that passes this combined screen is nLIGHT, Inc. (NASDAQ:LASR). The company designs and manufactures high-performance semiconductor and fiber lasers for applications in aerospace & defense, industrial processing, and microfabrication.
Strong Earnings Momentum Behind the Score
nLIGHT earns a High Growth Momentum rating of 6 out of 10, which is a solid score considering the demanding criteria of the rating. The underlying numbers are what drive that score, and they paint a clear picture of accelerating earnings strength:
This combination of triple-digit EPS growth, accelerating sales, consistent earnings beats, and upward analyst revisions is exactly what the High Growth Momentum Rating is designed to capture. The company has moved from a loss-making position two years ago to a trailing EPS of $0.48, and the forward estimates suggest that momentum is continuing. For growth investors, these are the kind of fundamental pressures that often precede sustained price appreciation.
Technical Strength and a Clear Setup
Beyond the fundamentals, nLIGHT’s technical profile is also strong. The ChartMill Technical Report assigns it a Technical Rating of 9 out of 10 and a Setup Rating of 7 out of 10. You can examine the full details in the technical analysis report.
Key technical observations include:
The Setup Rating of 7 indicates that the stock is forming a decent base. The automated trade suggestion in the technical report proposes an entry above the resistance zone at $75.24 with a stop-loss below the support at $64.96. While no automated suggestion should be taken as a trade recommendation, it does illustrate that the chart is showing a measurable consolidation pattern – a classic setup for a potential breakout.
For high growth momentum investors, a stock that combines explosive earnings growth with a healthy technical trend and a defined base is exactly the kind of candidate worth watching. The strong relative strength confirms that the market is already rewarding the company’s fundamental progress.
Finding More High-Growth Breakout Candidates
The screen that identified nLIGHT is designed to surface stocks that pair a high HGM rating with strong technical and setup scores. This approach narrows the field to names that have both the earnings momentum and the chart pattern that historically precede sustained moves. To explore the current list of stocks meeting these criteria, you can run the High Growth Momentum Breakout Setups Screen and adjust the parameters to your own preferences.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always conduct your own research and consider your risk tolerance before making any trading decisions.
Read full article here »