Kiniksa Pharmaceuticals (NASDAQ:KNSA) Identified by High Growth Momentum and Minervini Trend Screen

Kiniksa Pharmaceuticals International (NASDAQ:KNSA) has been identified by a screening method that joins Mark Minervini's strict Trend Template with a High Growth Momentum (HGM) score. This two-part method aims to find companies that are in strong technical uptrends and also display a fundamental quickening in business results that can support lasting price gains. The idea is that the largest stock advances happen when a company's good earnings and sales momentum is supported by a technically good chart formation, signaling institutional buying and a strong chance for the trend to persist.

Technical Strength: Following the Minervini Trend Template

A central idea of the Minervini method is to invest only in stocks showing clear technical strength. The Trend Template gives a step-by-step list to confirm a stock is in a definite Stage 2 uptrend. Kiniksa Pharmaceuticals satisfies these important technical points, which are made to select for stocks with the best chance of continuing their upward trend.

• Price Above Key Moving Averages: The present price of $38.12 is well above the rising 50-day ($34.80), 150-day ($28.51), and 200-day ($26.32) simple moving averages. This order confirms the stock is in a bull market phase across several time periods.
• Moving Average Order: The 50-day MA is positioned above both the 150-day and 200-day MAs, and the 150-day MA is above the 200-day MA. This rising, layered formation is a standard sign of a solid, good uptrend and shows increasing momentum.
• Nearness to Highs: The stock is now trading within 2.6% of its 52-week high of $39.12. Minervini's work indicates that market leaders frequently make their largest gains while close to new highs, as it shows a lack of sellers above the current price.
• Major Comeback: The share price is about 114% higher than its 52-week low of $17.82, showing a strong recovery pattern and major investor belief.
• Strong Relative Strength: With a ChartMill Relative Strength score of 89.27, KNSA is doing better than almost 90% of all stocks. A high RS score is essential in this method, as it finds industry leaders that institutions are buying.

Fundamental Quickening: Meeting High Growth Momentum

While the Trend Template finds when to buy, the fundamental review finds what to buy. The High Growth Momentum screen looks for companies showing very fast growth in earnings and sales, which serves as the reason for more price increases. Kiniksa's latest financial results point to this possibility.

• Very Fast Quarterly Earnings Growth: The company has shown notable earnings per share (EPS) speed increase. The latest quarter had a 483% year-over-year EPS increase, after a 144% gain in the quarter before. This type of quick speed increase often draws institutional interest and leads to major price reassessments.
• Strong Sales Growth: Revenue growth is also notable, with the last quarter growing more than 51% year-over-year. Good and speeding up sales growth gives a fundamental base to the earnings story, implying the company's products are getting good market acceptance.
• Positive Earnings Surprises: KNSA has exceeded EPS predictions in two of the last four quarters. Repeated earnings surprises can make analysts raise their future predictions, creating a positive loop of increasing expectations and buying.
• Route to Profitability: The company has recently become profitable, reporting positive EPS for the last twelve months. The improvement in quarterly profit margins—from 6.20% to 11.37% in the latest quarter—shows better operational effectiveness and pricing ability, a main point in Minervini's review of fundamentals.

Technical Condition and Setup Summary

The given technical report gives Kiniksa Pharmaceuticals a high score of 10 out of 10, showing very good technical condition. The long-term and short-term trends are both good, and the stock is performing better than most of its biotechnology counterparts. While the setup score is a middle 5, the report states that the stock is in a pullback inside its recent trading band, which might give a more attractive risk/reward entry chance as price swings lessen. The review finds a few clear support levels under the present price, which can be used to set sensible stop-loss points, a vital part of risk control in the Minervini method.

For a detailed look at the support and resistance levels, and the full technical review, you can see the full technical report for KNSA.

Find More Possible Candidates

Kiniksa Pharmaceuticals acts as a good example of a stock that fits with both momentum and growth investment ideas. For investors looking to find other similar chances, the screening process that found KNSA can be repeated.

You can find more possible candidates by using this "High Growth Momentum + Trend Template" screen.

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Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice of any kind. The author has no position in KNSA. All investment decisions involve risk, and you should conduct your own thorough research and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.