In the field of growth investing, joining a solid technical system with strict fundamental tests can be an effective way to find possible market leaders. One organized tactic is to blend Mark Minervini’s Trend Template, a group of rules made to find stocks in clear, strong uptrends, with an emphasis on high-growth momentum fundamentals. This two-part plan tries to locate companies that not only show forceful price momentum and institutional backing but also display quickening business results through earnings, sales, and profit margins. By sorting for securities that meet both technical force and fundamental growth speed, investors try to take part in stocks that are front-runners in their fields during good market periods.
Fabrinet (NYSE:FN), a company that offers sophisticated optical packaging and electronic manufacturing services, now offers an interesting example for this joined method.
Technical Force: Matching the Minervini Trend Template
The center of Minervini’s plan is the Trend Template, an eight-item list that makes sure a stock is in a definite, continued stage 2 uptrend before review. Fabrinet’s present chart and measurements display a firm match with these technical requirements.
- Price Above Important Moving Averages: The stock’s last price of $585.87 trades well above its rising 50-day ($481.87), 150-day ($415.16), and 200-day ($375.95) simple moving averages (SMAs). This multi-timeframe match points to steady buying force and a set bullish trend.
- Moving Average Order: The 50-day SMA is above both the 150-day and 200-day SMAs, and the 150-day SMA is above the 200-day SMA. This step-by-step order confirms the trend’s force and quickening momentum, a main idea of the template.
- Nearness to Highs: At $585.87, FN is within 4% of its 52-week high of $608.28, meeting the template’s rule that a stock be within 25% of its high. At the same time, the price is about 294% above its 52-week low of $148.55, well past the 30% minimum. This shows force instead of a comeback from severe lows.
- Better Relative Strength: With a ChartMill Relative Strength (CRS) score of 96.79, FN is doing better than nearly 97% of all stocks in the market. Minervini stresses that real leaders show high relative strength, as it points to institutional need and market leadership.
This technical view is supported by Fabrinet’s complete ChartMill Technical Rating of 10, pointing to outstanding health across both short and long-term timeframes. The technical report summary states the stock is "showing a nice and steady performance" compared to the whole market.
Fundamental Momentum: The Driver for High Growth
While the Trend Template finds the "how" of a stock’s price movement, the "why" frequently exists in its fundamental results. For high-growth momentum investors, quickening earnings and sales are important catalysts. Fabrinet’s recent financial measurements show several positive growth paths.
- Earnings Quickening: A main part of growth investing is not just growth, but quickening growth. FN displays hopeful signs here:
- Quarterly EPS growth (Q2Q) has quickened from 5.44% three quarters ago to 28.74% in the newest quarter.
- Analyst positive view is increasing, with the average EPS guess for next year changed upward by 9.03% over the last three months.
- Forceful Sales Growth: Top-line growth stays solid. Revenue growth for the last quarter was 35.90% year-over-year, and guesses for the next quarter indicate a 38.91% rise. This continued need is a positive fundamental catalyst.
- Profitability Keeping: Despite fast growth, the company has kept sound and somewhat improving profit margins. The last stated quarterly profit margin was 9.94%, up in order from earlier quarters. This shows the growth is not happening at the cost of profitability.
- Earnings and Revenue Beats: The company has topped analyst EPS guesses in two of the last four quarters and revenue guesses in two of the last four, showing a capacity to exceed market hopes.
These parts—quickening earnings, forceful sales forecasts, and firm execution—create the fundamental "fuel" that can maintain a technical uptrend, making the stock of interest to growth-focused investors.
Market Setting and Entry Points
It is important to see this setup inside the wider market. The S&P 500’s short-term trend is positive, which usually gives a more supportive setting for growth stocks to do well. Fabrinet works in the Electronic Equipment, Instruments & Components industry, and its high relative strength score of 96.79 shows it is a front-runner within this field too.
However, a point of care comes from the ChartMill Setup Quality Rating, which is now a 3. The technical report says that while FN’s technical health is outstanding, "it does not present a decent entry opportunity at the moment. Price movement has been a little bit too volatile to find a nice entry and exit point." This matches Minervini’s own stress on waiting for low-risk entry points, often through volatility contraction patterns (VCPs), instead of following extended stocks. The report proposes it "may be a good idea to wait for a consolidation or pullback before considering an entry."
Technical Report Summary
Fabrinet’s separate technical analysis report shows a view of a stock in a forceful uptrend. Important points include:
- A highest technical rating of 10.
- Both short-term and long-term trends are positive.
- The stock is doing better than 96% of the market and 86% of its industry peers.
- It is trading near new 52-week highs.
- Several support levels are found between $426 and $495, which could become important during any market pullback.
For a full breakdown of the support levels and complete analysis, you can look at the whole Fabrinet Technical Analysis Report.
Finding Like Chances
Fabrinet shows the kind of security that appears when checking for both technical trend force and fundamental growth momentum. Investors curious in using this joined Minervini and high-growth filter to the wider market can locate more possible choices by using the preset screen: High Growth Momentum + Trend Template Screen.
Disclaimer: This article is for information and learning only. It is not meant as investment advice, a suggestion, or an offer to buy or sell any security. The analysis is based on present data and methods, which are subject to change. Investing includes risk, including the possible loss of principal. You should do your own research and talk with a qualified financial advisor before making any investment choices. Please read our full disclaimer here.