For investors looking to join solid fundamental growth with positive technical patterns, a multi-layered screening method can be very useful. One approach uses filters for stocks that display three main traits: a high growth momentum profile, sound technical condition, and a favorable price arrangement ready for a possible breakout. This method tries to find companies both seeing quickening business fundamentals and trading in a way that points to institutional buying and a manageable entry point. The aim is to locate chances where forceful earnings momentum is meeting a technically good chart pattern.
Hesai Group (NASDAQ:HSAI) appears as a candidate from this type of screen. The Shanghai company, a designer and maker of LiDAR sensors for automotive and robotics uses, displays a notable mix of fast earnings growth and firm price action.
High Growth Momentum Profile
The center of this method starts with finding companies showing major short-term earnings and sales momentum, a sign of possible market leadership. Hesai Group's latest financial results match this goal firmly. The company's earnings per share (EPS) growth has been remarkable on a quarterly basis, showing forceful operational leverage and execution.
- Fast Quarterly EPS Growth: The latest quarter showed a year-over-year EPS rise of 688.2%. This comes after earlier quarters showing growth of 255.9% and 259.5%, confirming a continued time of outstanding profitability increase.
- Firm Sales Acceleration: Revenue growth is also sound and quickening. Sales grew 47.5% in the last quarter, up from 28.3% two quarters before, pointing to rising market acceptance for its LiDAR products.
- Positive Earnings Surprises: The company has topped analyst EPS estimates in two of the last four quarters, with an average beat of 12.7%. This record of exceeding forecasts can drive more positive sentiment and analyst changes.
- Solid Annual Growth: On a trailing twelve-month basis, EPS has grown 291.5%, while revenue has risen 10.7%. This pairing of top-line growth and large bottom-line increase is a main target for momentum investors searching for companies moving to profitability.
These measures add to Hesai's High Growth Momentum Rating of 6. While not at the highest point of the scale, this score shows clear strength in the important areas of quarterly momentum and earnings surprises, which are main forces for the CANSLIM and Minervini-style investing methods this screen follows.
Technical Strength and Market Position
A firm growth story must be supported by the price action in the market. Hesai's technical view gives this support, receiving a perfect Technical Rating of 10 from ChartMill. This top score means outstanding technical condition across several timeframes.
- Forceful Uptrend: Both the short-term and long-term trends for HSAI are graded as positive. The stock is trading above all its main moving averages (20, 50, 100, and 200-day SMAs), and these averages are themselves in rising arrangements, a standard mark of a good uptrend.
- Market Outperformance: The stock is displaying better relative strength, beating 93% of all stocks in the market over the past year and 87% of its group in the Automobile Components industry. This leadership is a key idea of momentum investing, as it shows institutional support and money moving into the stock.
- Trading Near Highs: HSAI is now trading in the higher part of its 52-week range, showing that it is taking part in the market's upward move and not falling behind much.
A Defined Breakout Setup
The last part is timing. A stock in a firm uptrend can be overstretched and difficult to enter. The best situation is to locate such a stock gathering its gains in a narrow range, forming a base for its next move up. Hesai shows this chance with a Setup Rating of 7.
According to the detailed technical report, the stock has been gathering in a range between about $21.90 and $29.05 over the past month, with movement decreasing, a sign of balance before a possible new directional move. The analysis notes a recent "Pocket Pivot" signal, a volume-based marker pointing to buying by bigger players. The setup finds a clear resistance level near $29.05 to $29.80. A clear move above this area could mark a breakout and the restart of the main uptrend, giving a possible entry point with a set support level below for risk control.
Conclusion
Hesai Group shows a case where a screening process made for high growth momentum investors has found a company with a notable story. The fundamental story is pushed by very fast quarterly earnings growth and quickening sales in the growing LiDAR market. This growth is backed by the stock's technical position, which shows market-leading relative strength inside a clear, long-term uptrend. Presently, the price action points to a gathering phase, giving a possible entry arrangement for investors who watch for a confirmed breakout above resistance.
This grouping of conditions, firm growth momentum, very good technical condition, and a favorable setup, tries to filter for chances where several positive elements come together. For investors wanting to examine other stocks that now meet like conditions for high growth momentum with a technical breakout pattern, you can see the newest results using the High Growth Momentum Breakout Setups screen.
Disclaimer: This article is for information only and does not form investment advice, a suggestion, or an offer to buy or sell any security. The study is based on given data and should not be the only ground for any investment choice. Always do your own research and think about talking with a qualified financial advisor before making any investment. Past results are not a guide for future results.
