Collegium Pharmaceutical Inc (NASDAQ:COLL) Shows High Growth Momentum with Strong Technicals

A methodical process for spotting stocks with high growth potential often mixes detailed chart study with solid business momentum. The system used here brings together Mark Minervini's Trend Template, which finds stocks in strong upward price movements, with a High Growth Momentum (HGM) filter to confirm these firms also show improving company fundamentals. This two-part method aims to locate market leaders early in their growth phases, where share price strength is confirmed by actual corporate results. Collegium Pharmaceutical Inc (NASDAQ:COLL) appears as a stock that presently meets the conditions of this joint approach.

Fitting the Minervini Trend Template

The Minervini Trend Template is built to sort for stocks showing outstanding technical condition and clear leading traits. COLL currently matches the main principles of this template, signaling a strong and continuing upward price trend.

• Price Above Key Moving Averages: The stock's present price of $47.35 trades well above its rising 50-day ($36.07), 150-day ($32.74), and 200-day ($31.97) simple moving averages. This layered arrangement is a typical indicator of a sound Stage 2 upward move.
• Moving Average Alignment: The 50-day SMA is positioned above both the 150-day and 200-day SMAs, and the 150-day SMA is also above the 200-day SMA. This sequential structure verifies that the short, medium, and long-term price directions are all moving upward together.
• Proximity to Highs: COLL is trading within 25% of its 52-week high of $47.50, showing solid momentum. At the same time, the current price is more than 30% above its 52-week low of $23.23, confirming a major rebound and a set upward trend.
• Superior Relative Strength: With a ChartMill Relative Strength (CRS) rating of 90.83, COLL is performing better than over 90% of the total stock market. Minervini stresses that genuine market leaders nearly always show high relative strength, as it points to institutional buying and better performance.

This technical setup is important because it methodically removes stocks in downward trends or consolidation phases, concentrating investment on those that have already shown their strength and are situated to keep moving higher.

Passing as a High-Growth Candidate

Besides a technically sound chart, the approach needs proof of fundamental improvement. COLL shows several measurements that add to a high growth momentum score.

• Strong Earnings Growth: The company has shown major earnings expansion, with EPS growth of 446.61% in the last reported fiscal year. Recent quarterly performance stays solid, with the last quarter showing a 39.75% year-over-year rise in EPS.
• Positive Earnings Surprises: COLL has exceeded analyst EPS forecasts in three of the last four quarters, with an average beat of almost 4%. This repeated overachievement often serves as a trigger, increasing investor attention and positive estimate changes.
• Upward Analyst Revisions: A notable sign of increasing confidence is the 29.1% upward change to the average next-year EPS estimate over the past three months. Such large revisions often come before more price gains as the market adapts to better future outlooks.
• Good Revenue Growth: Backing the earnings growth, revenue has grown by 11.41% over the trailing twelve months, with the most recent quarter speeding up to 31.42% year-over-year growth.

These fundamental features are important as they supply the "reason" for the price strength. Minervini's system suggests that the largest stock market winners are nearly always backed by solid and improving sales and earnings.

Technical Condition and Setup Evaluation

The provided technical report gives a complete summary of COLL's market position. The stock receives a perfect ChartMill Technical Rating of 10 out of 10, reflecting very good condition across short and long-term periods. The long-term trend is verified as positive, matching the general positive trend of the S&P 500. The report mentions important support areas, including a main zone between $36.94 and $37.45, which is created by a mix of key moving averages and trendlines.

However, the report also gives a critical warning for new purchases. While the technical rating is very good, the Setup Quality score is poor, presently at 1. This shows that the stock has become overbought after its recent strong move and is trading near the peak of its one-month range. For investors using a careful approach, this implies that while COLL is a solid stock to monitor, a more favorable, less-risky entry would probably appear during a future time of consolidation or retreat toward its set support levels. A complete breakdown of the technical study can be examined in the detailed COLL Technical Report.

Conclusion

Collegium Pharmaceutical Inc presents a strong example for investors using a joint technical and fundamental growth approach. It meets the strict needs of the Minervini Trend Template, verifying its position as a market leader in a clear upward trend. Also, its good earnings growth, positive surprises, and upward analyst revisions confirm the price movement with fundamental momentum. While the present sharp move indicates waiting for a more suitable entry, COLL represents the kind of high-caliber, high-momentum stock that such filters are made to find.

For investors looking for other possibilities that match this particular profile, the filtering process that found COLL can be repeated. You can find more potential choices by using the High Growth Momentum + Trend Template screen on ChartMill.

Disclaimer: This analysis is for informational and educational purposes only and is not intended as investment advice. The information provided does not constitute a recommendation to buy, sell, or hold any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions. Please read our full disclaimer for more details.