For investors looking for a mix of strong basic business performance and good chart-based entry levels, a dual filtering method can be very effective. By selecting stocks with a high ChartMill Technical Rating (above 7), a high Setup Quality Rating (above 7), and a good High Growth Momentum Rating (above 4), the process tries to find companies that are increasing their profits and sales at a quickening rate and are also in a steady upward price move and currently forming a pattern that hints at a possible upward move. This method combines the main ideas of growth investing with exact chart-based timing, trying to buy leading stocks as they rest before their next possible upward phase.
CNX Resources Corp (NYSE:CNX) appears from this filter, presenting a situation that deserves more attention from investors focused on price and earnings trends.
Basic Growth Trends
The base of the high growth momentum method is in finding companies with strong and often quickening profit and sales directions. CNX Resources shows several important traits that build its rating.
- Strong Year-Over-Year Increase: The company's trailing twelve-month (TTM) earnings per share (EPS) rose by over 40%, while TTM revenue went up by about 23.5%. This double increase is a good basic indicator.
- Notable Recent Sales Jump: Maybe more impressive is the recent three-month sales trend. The latest quarter showed a year-over-year sales increase of almost 347%, after a 43% rise the quarter before. While this speed of increase probably will not last forever, it shows forceful short-term business results.
- Good Cash Flow Production: Free cash flow per share over the TTM period rose by a notable 93.9%, indicating the company's profits are becoming real cash, which can fund more projects, lower debt, or pay shareholders.
- Favorable Analyst View: Analysts have been raising their forecasts, a main part of the momentum rating. Over the past three months, the average forecast for next year's EPS has increased by 6.2%, and revenue forecasts have gone up by 4.3%.
- Steady Earnings Beats: The company has reported EPS above forecasts in each of the past four quarters, with an average beat of 48.4%. This record of doing better than expected increases investor trust in management's plans and performance.
These elements together show a company in a strong basic upward move, which is exactly what the High Growth Momentum Rating is made to find.
Chart Health and Pattern Quality
A good basic story must be supported by price movement. According to the detailed ChartMill Technical Report, CNX shows both the strength and the pattern that chart-based traders seek.
- High Technical Rating (8/10): The report states CNX is in a good long-term direction. It is doing better than 80% of all stocks in the market over a one-year period and doing better than 73% of similar companies in the Oil, Gas & Consumable Fuels industry. The stock price is above its important average prices (20, 50, 100, and 200-day), which are all moving up, a typical sign of a sound upward trend.
- Tightening Range and Pattern (7/10): After a large rise, the stock has been moving in a tightening range between about $34.20 and $38.97 over the last month. This rest lets the stock absorb its increases and form a new base of support. The Setup Rating finds this tightening, noting that prices have been coming together and a clear support area is present near $35.65.
- Defined Risk Levels: The chart study finds a nearby resistance area around $40.91 to $41.09. A clear move above this point could indicate an upward move and continuation of the trend. On the other hand, the specified support areas give sensible levels for a stop-loss order, allowing for clear risk control. The report also points out a recent "Pocket Pivot" signal, a volume-based sign suggesting buying by bigger investors.
This pairing, a high technical rating confirming the trend and a good setup rating pointing out a usable tightening pattern, deals with the "when" to look at a stock, adding to the "why" given by the basic trends.
Summary
CNX Resources Corp represents an interesting option for investors using a high growth momentum method with chart-based rules. The company is displaying forceful basic trends, shown by a large recent sales increase, good cash flow production, and positive analyst forecast changes. At the same time, its stock chart mirrors this strength, trading in a sound long-term upward direction and currently resting in a tightening that presents a defined chart pattern. This match of strong profit trends and helpful price movement is the main idea of the combined filtering method.
For investors wanting to examine other stocks that fit these specific rules of high growth momentum paired with good chart-based upward move patterns, more study can be done using the set High Growth Momentum Breakout Setups screen.
Disclaimer: This article is for information only and is not financial advice, a support, or a suggestion to buy, sell, or keep any security. The filters and ratings noted are tools for study and beginning points for research, not promises of future results. Investing has risk, including the possible loss of your original investment. Always do your own complete research and think about your personal money situation and risk comfort before making any investment choices.
