In the search for high-growth investment opportunities, combining a strict technical framework with a focus on fundamental momentum can be an effective approach. This method involves first finding stocks showing strong, established uptrends using criteria like Mark Minervini's Trend Template, which filters for price strength and agreement across important moving averages. The second step adds a growth perspective, looking for companies showing very high earnings acceleration, strong sales growth, and better profitability, the signs of possible market leaders. This two-step strategy tries to find securities where strong business momentum is being supported by institutional buying pressure on the charts.
Aurinia Pharmaceuticals Inc (NASDAQ:AUPH) appears as a candidate that passes through this combined screen, presenting a case study in matching technical structure with fundamental change.
Alignment with the Trend Template
The Minervini Trend Template is made to find stocks in a clear Stage 2 advance, avoiding downtrends and sideways periods. Its rules make sure the stock is not only rising but doing so with the support of its main moving averages, pointing to continued institutional accumulation. A review of AUPH's technical position shows it meets the main points of this template:
- Price Above Key Averages: The stock trades above its rising 150-day and 200-day simple moving averages (SMAs). This is a main filter for confirming a long-term bullish trend.
- Moving Average Agreement: The shorter-term 50-day SMA is above the longer-term 150-day and 200-day averages, a standard setup signaling that near-term momentum is leading and supporting the longer-term uptrend.
- Nearness to Highs: AUPH's current price is within 25% of its 52-week high, an important Minervini rule that focuses attention on market leaders, not laggards recovering from deep lows.
- Superior Relative Strength: With a ChartMill Relative Strength (CRS) ranking of 88, AUPH is doing better than nearly 90% of all stocks in the market. High relative strength is a foundation of the method, as it finds securities that are in demand no matter the broader market movements.
This technical base suggests AUPH is in a positive trend. While the overall market (S&P 500) has been under pressure, the stock has kept a positive long-term trend and neutral short-term trend, showing clear resilience.
The High-Growth Fundamental Engine
Passing the technical screen is only part of the story for a growth-focused investor. The "High Growth Momentum" aspect looks for the fundamental fuel that can push a stock further. Here, AUPH's financial metrics show a company in a strong earnings acceleration phase, which Minervini often notes as a main driver for "superperformance."
- Very High Earnings Growth: The company has reported very high year-over-year earnings per share (EPS) growth. Recent quarterly figures show increases of 2500%, 130%, and 1500% over the prior-year periods, pointing to a strong and continued shift in profitability.
- Consistent Earnings Surprises: AUPH has beaten analyst EPS estimates in each of the last four quarters, with an average surprise of over 30%. This pattern of exceeding expectations often draws institutional interest and can lead to higher revisions in future estimates.
- Strong Sales Growth and Margin Gain: Revenue growth has been solid, with recent quarters showing increases of 29%, 8%, and 22%. More importantly, this sales growth is moving dramatically to the bottom line. The company's profit margin has grown greatly, moving from about 30-40% in prior quarters to 273% in the most recent report, highlighting major operating leverage and pricing power for its lupus nephritis therapy, LUPKYNIS.
- Solid Cash Flow Generation: Supporting the earnings story, free cash flow per share has grown by over 200% in the past year, giving the company financial flexibility to invest in its pipeline, including the development of AUR200 for other autoimmune diseases.
This mix of accelerating revenue, very high earnings, and growing margins represents the exact type of fundamental "catastrophic earnings change" that growth investors and trend-following strategies try to use early.
Technical Setup and Risk Considerations
According to ChartMill's own analysis, AUPH currently holds a Technical Rating of 6, reflecting its acceptable but not outstanding trend health within a difficult market. However, it gets a more notable Setup Rating of 8. This points to the stock consolidating in a fairly tight range after its prior advance, possibly forming a positive base.
- The analysis finds a clear support zone between $14.26 and $14.51, formed by a combination of trendlines and moving averages.
- Resistance is seen near $14.62 and more importantly around $16.25.
- A recent "Pocket Pivot" signal, a volume-based indicator suggesting accumulation, adds a positive note to the setup.
This technical position suggests the stock may be coiling before its next directional move. A clear breakout above the immediate resistance on strong volume could be seen as a new entry signal for trend followers, with the identified support zone acting as a logical area for a stop-loss order to handle risk.
For a detailed breakdown of the support, resistance, and trade setup, you can review the full ChartMill Technical Report for AUPH.
Conclusion
Aurinia Pharmaceuticals presents a notable case where a strong fundamental growth story meets a positive technical setup. The company's dramatic shift to profitability and solid commercial execution for LUPKYNIS provide the fundamental "catastrophe" that drives high-growth investing. At the same time, its price action follows the strict rules of the Trend Template, trading above key averages and showing high relative strength, which suggests the market is seeing this fundamental gain.
For investors using a strategy that joins growth and momentum, AUPH represents the type of candidate that deserves closer review. It shows the process of filtering for both clear business momentum and confirming price strength.
This security was found using a combined "High Growth Momentum + Trend Template" screen. To see other stocks currently passing this two-step method, you can access the live screening results here.
Disclaimer: This article is for informational and educational purposes only. It is not intended as investment advice, a recommendation, or an offer to buy or sell any security. The analysis is based on data provided and certain methods, but past performance is no guarantee of future results. Investing involves risk, including the potential loss of principal. Always conduct your own due diligence, consider your financial situation and risk tolerance, and consult with a qualified financial advisor before making any investment decisions.