Investors looking to join strict technical rules with an emphasis on fundamental improvement frequently use methods like the one made common by Mark Minervini. His plan, called Specific Entry Point Analysis (SEPA), methodically finds stocks ready for large moves by requiring they pass firm rules in two main parts. First, the stock must show a clear and verified upward price path, as described by his Trend Template. Second, it must have firm and improving fundamental growth in earnings and sales. This two-part method tries to find market leaders near the start of their big climbs, mixing the force of price movement with the base driver of company results.
ANGLOGOLD ASHANTI PLC (NYSE:AU) offers a clear example for this joined method. The gold mining company’s recent price movement shows a close match with Minervini’s technical model, pointing to institutional buying and a continuing positive period.
A Clear Technical Uptrend
The main aim of the Trend Template is to remove stocks in poor or resting periods, concentrating only on those in a verified Stage 2 climb. AU’s chart shows all the signs of such a path.
- Moving Average Order: The stock’s price is trading notably above its important moving averages. Importantly, these averages are arranged in the correct positive order: the 50-day SMA ($94.58) is above the 150-day SMA ($74.83), which is above the climbing 200-day SMA ($67.35). This order shows increasing force across several time periods.
- Nearness to Highs: A central Minervini idea is to buy strength, not weakness. AU is now trading within 5% of its 52-week high of $115.81, showing it is a market leader, not a follower. Also, its present price is about 286% above its 52-week low, confirming a strong recovery and uptrend are already in place.
- Better Relative Strength: Maybe most significant is AU’s very high relative strength (RS) number of 98.43. This means the stock has done better than 98% of the market over the last year. Minervini states that real market leaders regularly do better than the wider market, and a high RS number is a direct measure of that leadership.
The Fundamental Growth Driver
While a firm chart is necessary, Minervini’s plan needs the price move to be backed by fundamental gain. This is where the High Growth Momentum (HGM) filter works, looking for companies with fast earnings and sales paths. AU’s recent financial reports show a marked recovery and increase.
- Fast Earnings Growth: The company’s earnings per share (EPS) growth is very high. Year-over-year EPS growth is over 517%, and the latest quarter showed growth over 163% compared to the same time last year. This kind of increase is a main sign that often draws institutional investment and supports continued price gains.
- Firm Sales Growth: Revenue growth gives the top-line support for bottom-line profits. AU’s revenue rose by over 62% in the last quarter, showing firm demand and operational performance. This growth is not a single event but part of a wider positive path.
- Gaining Profitability: The company’s profit margin in the last reported quarter was about 27.7%, showing a step-by-step gain and indicating the company is turning its higher revenue effectively into net income. Growing margins are a sign of a fundamentally firming business.
Technical Condition and Position
A look at the detailed technical report for AU confirms its technical condition. The report gives the stock a full Technical Rating of 10 out of 10, noting its steady performance across both short and long-term periods. The long-term and short-term paths are both seen as positive. While the Setup Rating is a middle 5, suggesting the stock is not in a close, immediate resting shape, the study states that AU “has an excellent technical rating and also presents a decent setup pattern,” with very little price resistance above. This shows that while a perfect low-volatility shape may not be present now, the overall technical base is very firm.
Locating Comparable Chances
ANGLOGOLD ASHANTI PLC shows how the Minervini structure can find assets that are both technically firm and fundamentally recovering. For investors wanting to search for other securities that fit this mix of high-growth momentum and disciplined path rules, the ready-made screen is open for more study: High Growth Momentum + Trend Template Screen.
Disclaimer: This article is for informational and educational purposes only. It does not constitute investment advice, a recommendation, or an offer to buy or sell any security. The analysis is based on current data and methods, which are subject to change. Investing involves risk, including the potential loss of principal. Always conduct your own due diligence and consider consulting with a qualified financial advisor before making any investment decisions.
