ARCHROCK INC (NYSE:AROC) Combines High-Growth Momentum with Bullish Technical Setup

For investors wanting a systematic way to target growth, joining fundamental momentum with technical timing can be an effective plan. This process filters for companies showing solid earnings and sales speed, a sign of high-growth momentum, while also spotting those in a positive technical state, set for a possible move higher. The aim is to locate stocks where sound business basics coincide with an encouraging price chart, hinting the market might soon acknowledge and value that growth.

ARCHROCK INC (NYSE:AROC) appears as a prospect matching this two-part method. As a supplier of natural gas compression services and aftermarket support in the United States, its results are linked to energy sector activity. An examination of its financial numbers shows the momentum that makes it suitable for growth-oriented plans.

Fundamental Growth Momentum

The ChartMill High Growth Momentum Rating for AROC is 6, pointing to a good base of speeding business results. This rating combines several important growth and momentum measures, which are vital for finding companies with a chance for continued strong performance.

• Earnings Power: The company's trailing twelve-month (TTM) EPS is $1.54, showing a large year-over-year increase of more than 67%. This firm profitability is the core of the investment idea.
• Quarterly Speed: Maybe more significant for momentum investors is the latest pattern. The last reported quarter had EPS growth of 81.8% against the same quarter last year. While the speed is predicted to slow, forecasts still point to positive year-over-year growth next quarter.
• Sales Growth: Top-line increase supports the bottom-line gain. Revenue growth for the last quarter was 30.9%, after a stronger increase of 41.6% the quarter before, showing ongoing need for its services.
• Margin Gain: A main signal of operational efficiency and pricing strength is growing profit margins. Archrock's quarterly profit margin has shown good levels, and the annual margin has moved up noticeably from 5.07% two years ago to 14.68% in the last reported fiscal year.
• Estimate Changes: Analysts have been moving their views up, with the average EPS forecast for the next year adjusted up by about 1.3% over the past three months. Positive changes frequently come before more price gains as expectations are set higher.

These elements together describe a company not only increasing, but doing so with better efficiency and momentum, exactly the type looked for by growth and momentum investors using methods like CANSLIM.

Technical Strength and Setup Quality

Sound fundamentals are best used when the stock's price movement is agreeable. Based on the detailed technical report, AROC currently shows a positive technical view, getting a Technical Rating of 8 and a Setup Rating of 8.

• Trend Condition: The report states that both the long-term and short-term trends for AROC are good. The stock is priced above its important moving averages (20, 50, 100, and 200-day), which are all rising, confirming the uptrend's strength.
• Consolidation and Chance: The high Setup Rating is especially important for timing an entry. It signals the stock has been consolidating lately, with lower volatility, forming what the analysis calls a "bull flag" pattern. This pattern usually happens after a strong rise and is a pause that might come before the next upward move.
• Clear Support and Resistance: The technical analysis finds several specific support zones below the current price, with the closest main support grouped near $24.70 - $24.92. On the other hand, a resistance zone is between $26.41 and $26.51. This clear framework allows for specific risk management, a key part of systematic trading.
• Market Relative Performance: While AROC's absolute trend is good, it is notable that it is performing about the same as the wider market and its industry group. This implies its momentum is specific to the company and not just due to a general market rise.

The mix of a high Technical Rating and a high Setup Rating implies AROC is both in a sound uptrend and giving a possible entry point after a time of consolidation. This matches well with the plan of looking for high-growth companies at a technically good time.

A Strategy in Practice

Archrock shows how the combination of fundamental momentum and technical analysis can point out possible chances. The company's quickening earnings, growing margins, and positive estimate changes give the "why" for investment review. The technical view, a stock in a verified uptrade, pausing in a bull flag formation near specific support, gives a possible "when" for entry, trying to join the next expected part of the trend.

This combined filtering method is made to sort the market for such matches. For investors wanting to find other securities that meet these conditions of solid growth momentum paired with good technical setups, more study can be done using the set High Growth Momentum Breakout Setups Screen.

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Disclaimer: This article is for information and learning only and is not investment advice, a suggestion, or an offer or request to buy or sell any securities. The presented study is from given data and should not be the only ground for any investment choice. Investors must do their own separate research and talk with a qualified financial advisor before making any investment decisions. Past results do not guarantee future outcomes.