The Strategy: Strong Growth Meets Technical Breakout
Strong growth stocks can deliver exceptional returns, but only if you enter at the right time. That's the idea behind combining fundamental strength with technical setups: you wait for companies that are growing earnings and revenue quickly, have solid profitability and a healthy balance sheet, and then look for a chart pattern that suggests the market is about to reward that growth again. A breakout above a resistance zone, confirmed by rising moving averages and relative strength, can signal that the next leg higher is beginning. This approach filters out stocks that look good on paper but are already extended or breaking down technically.
Why Neurocrine Biosciences Fits the Bill
Neurocrine Biosciences (NASDAQ:NBIX) is a neuroscience-focused biopharmaceutical company with approved products for tardive dyskinesia, Huntington's disease chorea, endometriosis, and uterine fibroids. Its lead drug INGREZZA (valbenazine) is the cornerstone of revenue, but the pipeline includes several late-stage candidates that could extend the growth runway. The company has been consistently profitable, with a gross margin of 98.17% and no debt on the balance sheet. When a growth screen flags NBIX, it's because the business metrics are attractive across the board.
Fundamental Strength: Growth, Profitability, and Health
The fundamental analysis report for NBIX shows a strong overall rating of 7 out of 10, with standout scores in growth (9/10) and profitability (8/10). The growth rating is driven by excellent historical performance:
- EPS growth of 120% over the past year and a 29.09% compound annual growth rate over five years.
- Revenue growth of 28.59% in the last year, with a 22.29% five-year compound rate.
- Future expectations remain strong, with EPS projected to grow 34.65% annually and revenue 14.75% annually.
The profitability rating is reinforced by operating margins of 25.75% and return on equity of 19.62%, both among the best in the Biotechnology industry. The health rating of 7/10 reflects a zero-debt position, an Altman-Z score of 8.81 (indicating very low bankruptcy risk), and comfortable liquidity ratios. This is the kind of financial foundation that allows a growth company to reinvest without worrying about interest coverage or refinancing risk.
The valuation rating of 7/10 is interesting: while the trailing P/E of 27.08 is in line with the S&P 500, it is cheap relative to industry peers (93.89% of biotech stocks are more expensive). The forward P/E of 17.87 and a low PEG ratio suggest the market has not fully priced in the expected earnings acceleration. The combination of strong growth and reasonable valuation is exactly what the GARP (Growth at a Reasonable Price) school looks for.
Technical Setup: Positioned for a Breakout
The technical analysis report assigns NBIX a rating of 9/10, with a setup rating of 8/10. The chart shows a sustained uptrend:
- Short-term and long-term trends are positive, with the 20, 50, 100, and 200-day simple moving averages all rising.
- The stock is trading near its 52-week high of $181.18 and has outperformed 74% of its industry peers.
- In the last month, price has consolidated in a range of roughly $163 to $181, and recent trading sits in the middle of that range, often a sign that a fresh breakout could be forming.
The report identifies a resistance zone between $180.55 and $180.56, just above the current price. A buy-stop order at $180.57 would trigger a breakout above that level. The nearest support zone is $170.87–$174.67, offering a well-defined risk level for a stop-loss. The suggested entry would place the potential loss at about 5.38%, with a position size that fits a 1% portfolio risk tolerance. Volume is solid at over 1.1 million shares per day, providing liquidity for both entry and exit.
Why This Combination Matters for the Strategy
A strong-growth stock with a healthy balance sheet and a technical breakout pattern is the sweet spot for this screening approach. The fundamentals tell you the business is compounding, revenue and earnings are growing, margins are wide, and there is no debt to choke growth if interest rates stay where they are. The technical setup tells you when to act: after a period of consolidation near resistance, with rising moving averages confirming the trend. NBIX ticks both boxes, which is exactly why it appeared in a screen that filters for strong growth, decent profitability and health, and a high setup rating.
More Candidates Like This
This screen is designed to surface stocks where the business is firing on all cylinders and the chart is setting up for a potential move. For a full list of current results, run the [Strong Growth with Technical Setup screen](https://www.chartmill.com/stock/stock-screener?sid=205&f=v1_50b500,p
Read full article here »
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Neurocrine Biosciences (NASDAQ:NBIX): Strong Growth Stock with Technical Breakout Setup
The Strategy: Strong Growth Meets Technical Breakout
Strong growth stocks can deliver exceptional returns, but only if you enter at the right time. That's the idea behind combining fundamental strength with technical setups: you wait for companies that are growing earnings and revenue quickly, have solid profitability and a healthy balance sheet, and then look for a chart pattern that suggests the market is about to reward that growth again. A breakout above a resistance zone, confirmed by rising moving averages and relative strength, can signal that the next leg higher is beginning. This approach filters out stocks that look good on paper but are already extended or breaking down technically.
Why Neurocrine Biosciences Fits the Bill
Neurocrine Biosciences (NASDAQ:NBIX) is a neuroscience-focused biopharmaceutical company with approved products for tardive dyskinesia, Huntington's disease chorea, endometriosis, and uterine fibroids. Its lead drug INGREZZA (valbenazine) is the cornerstone of revenue, but the pipeline includes several late-stage candidates that could extend the growth runway. The company has been consistently profitable, with a gross margin of 98.17% and no debt on the balance sheet. When a growth screen flags NBIX, it's because the business metrics are attractive across the board.
Fundamental Strength: Growth, Profitability, and Health
The fundamental analysis report for NBIX shows a strong overall rating of 7 out of 10, with standout scores in growth (9/10) and profitability (8/10). The growth rating is driven by excellent historical performance:
The profitability rating is reinforced by operating margins of 25.75% and return on equity of 19.62%, both among the best in the Biotechnology industry. The health rating of 7/10 reflects a zero-debt position, an Altman-Z score of 8.81 (indicating very low bankruptcy risk), and comfortable liquidity ratios. This is the kind of financial foundation that allows a growth company to reinvest without worrying about interest coverage or refinancing risk.
The valuation rating of 7/10 is interesting: while the trailing P/E of 27.08 is in line with the S&P 500, it is cheap relative to industry peers (93.89% of biotech stocks are more expensive). The forward P/E of 17.87 and a low PEG ratio suggest the market has not fully priced in the expected earnings acceleration. The combination of strong growth and reasonable valuation is exactly what the GARP (Growth at a Reasonable Price) school looks for.
Technical Setup: Positioned for a Breakout
The technical analysis report assigns NBIX a rating of 9/10, with a setup rating of 8/10. The chart shows a sustained uptrend:
The report identifies a resistance zone between $180.55 and $180.56, just above the current price. A buy-stop order at $180.57 would trigger a breakout above that level. The nearest support zone is $170.87–$174.67, offering a well-defined risk level for a stop-loss. The suggested entry would place the potential loss at about 5.38%, with a position size that fits a 1% portfolio risk tolerance. Volume is solid at over 1.1 million shares per day, providing liquidity for both entry and exit.
Why This Combination Matters for the Strategy
A strong-growth stock with a healthy balance sheet and a technical breakout pattern is the sweet spot for this screening approach. The fundamentals tell you the business is compounding, revenue and earnings are growing, margins are wide, and there is no debt to choke growth if interest rates stay where they are. The technical setup tells you when to act: after a period of consolidation near resistance, with rising moving averages confirming the trend. NBIX ticks both boxes, which is exactly why it appeared in a screen that filters for strong growth, decent profitability and health, and a high setup rating.
More Candidates Like This
This screen is designed to surface stocks where the business is firing on all cylinders and the chart is setting up for a potential move. For a full list of current results, run the [Strong Growth with Technical Setup screen](https://www.chartmill.com/stock/stock-screener?sid=205&f=v1_50b500,p
Read full article here »