For investors aiming to join detailed technical study with a focus on foundational growth, the method created by Mark Minervini offers a strong framework. This process, often called the SEPA (Specific Entry Point Analysis) strategy, methodically finds stocks showing both strong price trends and essential business progress. The process starts with the Minervini Trend Template, a group of technical filters made to separate stocks in established, long-term upward trends. From this technically chosen group, the strategy then uses fundamental filters to find companies showing quickening earnings and sales growth, the sign of real market leaders. This two-part method tries to catch stocks not only going higher, but doing so for a foundationally good cause, placing them for possible continued strong performance.
A Technical Base Made on Force
Warrior Met Coal Inc. (NYSE:HCC) offers a strong example for the first, technical part of this strategy. A look at its chart and main measures shows a stock that fits closely with the Minervini Trend Template's main ideas, which are made to filter for stocks in a clear "Stage 2" rise.
The template's moving average rules are clearly met, showing forceful and matched movement across several time periods:
- The present price trades far above the rising 50-day ($89.20), 150-day ($77.55), and 200-day ($71.06) simple moving averages.
- The nearer-term 50-day moving average is above both the 150-day and 200-day averages, confirming the trend's quickening.
- Importantly, the 200-day moving average itself has an upward slope, having moved up from about $70.81 to its present level, meeting the rule for a continued long-term upward trend.
Also, the stock's place compared to its 52-week range points to its leading position. With a present price of $95.58, HCC is trading within 10% of its 52-week high of $105.35, meeting the template's need to be within 25% of the high. At the same time, the price is over 150% above its 52-week low of $38.00, well past the 30% limit. This pairing, nearness to new highs while being meaningfully far from lows, is a standard trait of leading stocks in a forceful upward trend. Lastly, with a ChartMill Relative Strength (CRS) score of 92.63, HCC is doing better than over 92% of the market, a main Minervini filter that chooses sector and market leaders.
Fundamental Progress: The Growth Driver
Meeting the technical filter is only the first stage. The Minervini strategy stresses that the largest gainers are driven by foundational quickening. This is where the "High Growth Momentum" part of the filter is important, and HCC's newest financial reports show signs of a major turning point.
While the company's year-over-year earnings (EPS) growth on a trailing twelve-month basis is down, the most recent three-month data shows a sharp change that fits the strategy's focus on change and quickening. The latest quarter's EPS jumped 193% compared to the same quarter last year. Maybe more significantly, analyst opinion is turning strongly positive, a main early sign. The average guess for next year's earnings has been changed upward by over 23% in the last three months. This upward change pattern is a key Minervini foundational filter, as it often comes before continued institutional buying.
For sales, revenue growth is also speeding up again. Sales increased by 29% in the most recent quarter, and guesses for the next quarter's revenue growth are above 70%. This return in both earnings and sales movement, joined with rising analyst hopes, gives the foundational "spark" that the SEPA strategy tries to find, hinting the recent forceful price trend may be backed by getting better business foundations.
Technical Condition and Present Position
ChartMill's own technical report gives a combined view of HCC's technical condition, giving it a strong score of 9 out of 10. The report confirms the positive long and short-term trends and notes the stock's better performance compared to the wider market. It finds two set support areas below the present price, which can work as guide points for risk control.
However, the report also gives a note of care related to entry timing: the Setup Quality score is now low (1 out of 10). This shows that after its strong recent rise, the stock may be stretched in the short term and is not now making a tight, low-volatility pause pattern, such as the Volatility Contraction Pattern (VCP) Minervini likes for best entry. The report outline proposes waiting for a time of pause to allow for a more set, lower-risk entry point to form. You can see the full, detailed technical study on the ChartMill Technical Report for HCC.
Locating Like Chances
Warrior Met Coal shows the kind of position that appears when joining trend-following technical rules with filters for foundational movement shifts. For investors looking to use this strict method to find other possible choices, the preset filter that found HCC can be a useful starting place.
You can see the present results of this "High Growth Momentum + Trend Template" filter for yourself here: 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 study is based on data and methods thought to be dependable, but no promise is made about its correctness or fullness. Investing in stocks includes risk, including the possible loss of original money. You should do your own study and talk with a qualified financial advisor before making any investment choices.