For investors looking to join strong growth potential with precise technical entry points, the method created by Mark Minervini offers a useful framework. This method, called the Specific Entry Point Analysis (SEPA) strategy, finds market leaders by joining strict fundamental growth screens with a defined technical checklist, the Trend Template. The aim is to locate stocks already in strong uptrends, supported by improving earnings and sales, and then time entries during calm consolidation patterns. A recent scan joining Minervini's Trend Template with a High Growth Momentum (HGM) filter has found one such candidate: Bloom Energy Corp. (NYSE:BE).
Meeting the Minervini Trend Template
The central part of Minervini's strategy is confirming a stock is in a definite, long-term uptrend before review. The Trend Template's technical rules are made to filter out weak or resting stocks, focusing only on those showing clear strength. A look at Bloom Energy's chart shows it meets these strict specifications.
- Price Above Key Moving Averages: The stock's current price is clearly above its rising 50-day, 150-day, and 200-day simple moving averages (SMAs). This arrangement points to steady buying pressure across all major timeframes.
- Positive Moving Average Arrangement: The 50-day SMA ($112.91) trades above both the 150-day SMA ($83.15) and the 200-day SMA ($67.22), while the 150-day SMA also sits above the 200-day SMA. This "stacked" order is a classic sign of a good Stage 2 advance.
- Nearness to Highs: At its current level, BE is trading within 10% of its 52-week high of $167.57, meeting the template's rule to be within 25% of the high. At the same time, the price is nearly 900% above its 52-week low, showing great momentum off the bottom.
- Superior Relative Strength: Maybe most significant, Bloom Energy's ChartMill Relative Strength (CRS) score is 99.42, meaning it has done better than over 99% of the market. Minervini stresses that true market leaders show high relative strength, often before the wider market sees their potential.
This combination of factors leads to a perfect ChartMill Technical Rating of 10, confirming the stock is in a strong technical uptrend. For followers of the SEPA method, this meets the important "Trend" part, giving a solid base for more review.
The High Growth Fundamental Engine
While a strong chart is necessary, Minervini's strategy requires that technical strength be supported by superior fundamental performance. The "High Growth Momentum" part of the scan looks for companies showing very strong and improving growth in earnings and sales—the type that draws institutional investment and pushes continued price gains. Bloom Energy's recent financial numbers show this strong fundamental catalyst.
Earnings Growth Improvement: The company is showing notable profit momentum. Earnings Per Share (EPS) growth has improved greatly on a quarterly year-over-year basis:
- Most Recent Quarter: +1600%
- Previous Quarter: +266.7%
- Two Quarters Ago: +117.6%
This sequence of improving growth is a main idea of the strategy, hinting at better business dynamics and the chance for positive earnings surprises. Also, analysts have increased their EPS estimates for the next year by over 14% in the last three months, pointing to growing belief in the company's future.
Strong Sales Increase: Revenue growth gives the top-line proof for bottom-line gains. Bloom Energy's sales growth stays strong, with the last quarter up 57.1% year-over-year. The company has also beaten revenue estimates in each of the last four quarters by an average of over 9%, showing a steady ability to do better than expected.
Profitability Change: After times of losses, the company has lately reached positive profitability, with a trailing twelve-month EPS of $0.71. The large year-over-year EPS growth of 517.6% signals a major turning point, a feature often seen in stocks before they start big price advances.
Technical Condition and Setup Points
According to the detailed ChartMill Technical Report, Bloom Energy's technical condition is very good. The long-term and short-term trends are both rated as positive, and the stock is a leader within its Electrical Equipment industry, doing better than 98% of its peers. The report finds clear support areas, including a main trendline near $101.98 on the weekly chart.
However, the report also notes a current Setup Quality rating of 3. This points out that while the stock's trend is strong, its recent price movement has been jumpy and stretched, making a good, low-risk entry point hard to find at this time. For Minervini-style investors, this shows the need for patience—waiting for the stock to form a calmer consolidation or Volatility Contraction Pattern (VCP) would give a more defined entry with a clearer stop-loss level. The present market situation, with the S&P 500's short-term trend positive, may give such a setup chance later.
Summary and Next Steps
Bloom Energy Corp. presents a useful example for the Minervini SEPA and high-growth momentum method. It meets the strict technical checklist of the Trend Template, confirming a solid Stage 2 uptrend. Fundamentally, it shows the very strong and improving earnings growth that the strategy looks for, pushed by strong sales increase and a noticeable change in profitability. The stock's perfect Technical Rating of 10 and top relative strength further support its status as a market leader.
For a full look at the stock's technical view, including support and resistance levels, you can see the full ChartMill Technical Report for BE.
Want to find other stocks that meet this mix of high-growth fundamentals and solid technical trends? You can run the same scan using the High Growth Momentum + Trend Template screener on ChartMill.
Disclaimer: This article is for informational and educational purposes only. It is not intended as investment advice, nor does it constitute a recommendation to buy, sell, or hold any security. The analysis is based on current data and a specific investment methodology; past performance is not indicative of future results. Always conduct your own due diligence and consider consulting with a qualified financial advisor before making any investment decisions.
