The method used in this study joins Mark Minervini's strict Trend Template with a search for strong growth momentum, forming a two-part process for picking stocks. Minervini's framework is built to find stocks in strong upward movements by applying firm technical rules, confirming an investment is placed in a leading company during a period of upward movement. This is combined with a fundamental filter for strong growth momentum, which looks for firms displaying increasing earnings and sales, a feature often seen in the market's strongest performers. This joined plan intends to find stocks that are both technically healthy and fundamentally set for notable growth.
Technical Strength: Following the Minervini Trend Template
A central idea of the Minervini plan is to invest in upward movement, not downward movement, by concentrating on stocks that are already in clear upward trends. The Trend Template supplies a structured list to confirm this. GENERAL ELECTRIC (NYSE:GE) displays a strong technical picture that fits these ideas.
- Trading Above Important Moving Averages: The stock's price is above its increasing 50-day, 150-day, and 200-day simple moving averages. This configuration verifies the stock is in a continuing uptrend across short, medium, and long-term periods, a basic part of the Trend Template.
- Strong Movement and Nearness to Highs: The present price is about 91% higher than its 52-week low and less than 4% from its 52-week high. Minervini notes that real market leaders are frequently seen close to new highs, not with heavily discounted poorer performers, as this shows steady demand and positive movement.
- Better Relative Performance: With a ChartMill Relative Strength rating of 91.94, GE is performing better than most stocks in the market. A high relative strength number is important, as it finds industry leaders that often lead market increases and show the strongest price gains.
Fundamental Health: Meeting the Standard for a High Growth Momentum Stock
While technicals find the when to purchase, fundamentals help verify the why. The High Growth Momentum (HGM) rating evaluates a company's basic business condition and its possibility for future growth. GE shows several fundamental features that growth investors look for.
- Strong and Increasing Earnings: The company has reported notable earnings growth, with EPS (TTM) rising 46% year-over-year. More notable is the recent quarterly movement, with the last quarter showing 44% growth versus the same time the previous year. This trend of solid, and sometimes quickening, earnings is a key feature of firms in high-growth stages.
- Regular Earnings Outperformance: GE has exceeded earnings predictions in each of the past four quarters, with an average surprise of more than 15%. This regular beating of estimates can indicate that analysts are adjusting to a company's getting better outlook and may result in higher estimates and more institutional buying.
- Positive Analyst Outlook and Estimate Changes: Analyst confidence is shown in rising estimates, with the average EPS prediction for the next year increasing by almost 12% over the past three months. Such estimate changes are a strong positive factor, as they show increasing belief in the company's future earnings potential.
- Good and Growing Profitability: The company keeps solid profit margins, with the last quarter at 17.7%. A profitable operation with good margins supplies the monetary support for ongoing growth and spending.
Technical Analysis Summary
The detailed technical report for GE gives a top rating of 10 out of 10, showing very good technical condition. The study mentions a positive long-term trend and points out that the stock is a high performer, doing better than 91% of the market. While the short-term trend is currently flat as the stock settles inside a band, this time of settling has created a reasonable formation. The report finds specific support and resistance points, giving a structure for possible entry and exit levels for traders. For a full look at the technical view, including exact support and resistance areas, you can see the full technical analysis report for GE.
Finding Other Possible Selections
The joining of Minervini's trend-following rules and a focus on high-growth fundamentals makes a strong filter for finding leading stocks. GE acts as a good illustration of a security that satisfies these strict requirements. For investors looking to find other companies showing similar technical and fundamental health, this High Growth Momentum + Trend Template screen can be a useful beginning point for more study.
Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. The analysis is based on publicly available data and should not be interpreted as a recommendation to buy or sell any security. Always conduct your own due diligence and consult with a qualified financial advisor before making any investment decisions. Please read our full disclaimer and terms of service to understand your obligations.
