For investors looking to join strong growth potential with systematic trend-based methods, the system created by Mark Minervini offers a notable framework. This method, outlined in his SEPA (Specific Entry Point Analysis) system, depends on finding stocks that are already in strong uptrends, aided by improving fundamental growth. The strategy applies a strict "Trend Template" to select for technical health, confirming a stock is in a definite Stage 2 advance, and then adds strict fundamental filters to find companies showing fast earnings and sales progress. This two-part method tries to find leaders early in their large price advances while controlling risk through exact entry and exit guidelines.
A recent filter based on this idea, made to find stocks fitting both Minervini's Trend Template and standards for strong growth progress, has identified EVOKE PHARMA INC (NASDAQ:EVOK) as a candidate for more review.
A Clear Technical Picture
From a pure price action view, EVOK shows a chart that matches the Minervini Trend Template's need for clear health. The template's main aim is to remove stocks in poor or resting stages, concentrating only on those with confirmed and increasing progress across several time periods.
A check of EVOK's main metrics shows a stock clearly in a Stage 2 uptrend:
- Price vs. Moving Averages: The current price is positioned well above its rising 50-day ($7.64), 150-day ($5.40), and 200-day ($4.81) simple moving averages (SMAs). This ordered position is a standard sign of continued buying interest.
- Moving Average Order: Importantly, the 50-day SMA is above the 150-day SMA, which is above the 200-day SMA. This positive order confirms the trend's health and speed.
- Nearness to Highs: Trading at $10.93, EVOK is within 0.1% of its 52-week high of $10.94, meeting the template's choice for stocks showing strength by trading near new highs. At the same time, the price is over 460% above its 52-week low, showing a strong recovery trend.
- Relative Strength: With a ChartMill Relative Strength (CRS) score of 97.85, EVOK is performing better than nearly 98% of the whole market. Minervini notes that real market leaders regularly show high relative strength, as it points to institutional buying and group leadership.
This technical view meets the Trend Template's primary aim: to make sure an investor is only reviewing stocks where the direction of least pressure is clearly upward, thus improving the chances for success.
The Basis for Progress: Strong-Growth Fundamentals
While a healthy chart is necessary, Minervini's strategy states that the largest winners are always driven by outstanding fundamental growth. The "high growth momentum" part of the filter looks for companies where business results are speeding up, often acting as the reason for the technical move higher. EVOK's financial metrics indicate it has this kind of driving basis.
The company's recent results show marked speed in its main activities:
- Strong Revenue Growth: Top-line growth is solid, with last quarter's sales rising 61.4% year-over-year. This comes after a pattern of good expansion, with revenue growth over the trailing twelve months (TTM) at 67.4%.
- Quickly Getting Better Earnings Path: Maybe more important is the direction in earnings. While the company is not yet making money on a net basis, the direction in its losses is getting much better. Year-over-year EPS growth for the TTM period is at 79.9%, showing a fast move toward profitability. The consecutive quarterly improvements are even more notable, with the newest quarter showing EPS growth of 52.1% and the two quarters before growing at 33.3% and 75.0%, in order.
- Analyst View: Forward estimates also show positive progress. Analyst changes for next year's earnings have risen by 4.1% over the last three months, hinting at increasing belief in the company's short-term future.
For a strong-growth investor, this mix of speeding revenue and a quickly improving earnings picture is central. It suggests the company's product, GIMOTI for diabetic gastroparesis, is getting market acceptance. In the Minervini system, this fundamental speed is the "story" that can draw institutional attention and support a strong price trend.
Technical Condition and Position Review
Taking a wider view for a broader technical review, ChartMill's own analysis gives a measured summary of EVOK's position. The stock gets a high Technical Rating of 10 out of 10, showing very good condition across trend, speed, and relative strength measures. Both its short-term and long-term trends are scored as positive, confirming the multi-timeframe health seen in the Trend Template.
The analysis states the stock is trading in a narrow band near its highs, which can be a resting phase within the larger uptrend. However, the current Setup Quality Rating is a 6. This means that while the stock is technically very good, the recent price action has been a bit changeable, making the finding of an exact, lower-risk entry point more difficult right now. The report proposes waiting for a narrower resting phase to form, which would possibly give a clearer move higher signal with a better risk/reward balance, a idea central to Minervini's focus on "volatility contraction patterns" (VCPs).
You can see the full, detailed technical review for EVOKE PHARMA INC via the ChartMill Technical Report.
Finding Like Chances
EVOK shows the kind of candidate that appears when joining strict trend and growth filters. For investors wanting to use this systematic method to find other possible leaders, the filtering system can be copied.
You can see the current results of this "High Growth Momentum + Trend Template" filter and find other qualifying stocks by using this link: High Growth Momentum + Trend Template Screen.
Disclaimer: This article is for informational and educational purposes only. It is not a recommendation to buy or sell any security. The analysis is based on data provided and certain filtering standards; it does not form investment advice. Investors should do their own complete research, think about their financial position, risk comfort, and talk with a qualified financial advisor before making any investment choices. Please read our full disclaimer here.
