For investors aiming to join strict technical discipline with fundamental growth, the methods of Mark Minervini offer a strong framework. His strategy, called Specific Entry Point Analysis (SEPA), methodically finds stocks ready for large moves by requiring agreement on two important fronts. First, a stock must show a strong technical pattern, as described by the Minervini Trend Template, proving it is in a solid, confirmed uptrend. Second, it must have backing from improving fundamental growth in earnings and sales, showing the price strength has a foundation in better business results. This two-step method tries to find leaders early in their big price moves while controlling risk with exact entry and exit rules.
KORU Medical Systems Inc (NASDAQ:KRMD) stands as a present candidate that seems to meet the first look requirements of this joined method. The medical device company, centered on subcutaneous infusion systems, has displayed a clear price path and fundamental gains that call for a more detailed examination using the Minervini perspective.
Agreement with the Minervini Trend Template
The foundation of Minervini's technical screening is the Trend Template, a group of strict rules made to sort for stocks in a clear Stage 2 uptrend. KRMD's present chart setup shows a strong agreement with these main requirements:
- Price Above Key Moving Averages: The stock trades at $5.68, solidly above its rising 50-day ($5.56), 150-day ($4.43), and 200-day ($4.04) simple moving averages (SMAs). This layered order is a standard sign of continued positive momentum across several timeframes.
- Moving Average Order: The 50-day SMA is positioned above both the 150-day and 200-day SMAs, while the 150-day SMA is above the 200-day SMA. This positive sequence confirms the force and steadiness of the long-term trend.
- Nearness to Highs: KRMD's price is about 14% under its 52-week high of $6.61, fully inside the Template's rule of being within 25% of the high. At the same time, the price is more than 205% above its 52-week low of $1.86, greatly passing the 30% limit. This shows strong rebound momentum and a place of force, not frailty.
- Better Relative Strength: With a ChartMill Relative Strength (CRS) score of 89.39, KRMD does better than almost 90% of the market. Minervini stresses that real market leaders regularly display high relative strength, as it points to institutional buying and better performance despite wider market changes.
This technical picture meets the first "which stock" question in the Minervini process, marking KRMD as a technically sound candidate in a definite uptrend.
Fundamentals for Strong Growth Momentum
While the Trend Template finds the "when," Minervini's SEPA strategy requires a fundamental reason, the "why." The screen's High Growth Momentum (HGM) filter looks for improving earnings and sales, a sign of companies before their largest price jumps. KRMD's recent financial numbers show several good growth signs:
- Earnings Improvement: The company has shown clear gain in its bottom line. Earnings per share (EPS) for the trailing twelve months show 30% year-over-year growth. More notably, recent quarterly momentum is firm, with the last reported quarter showing EPS growth of 33.3% year-over-year, and the quarter before that jumping 100%.
- Steady Earnings Surprises: KRMD has exceeded analyst EPS estimates in all of the last four quarters, with an average surprise of almost 40%. This regular better performance can work as a strong catalyst, pushing institutional re-evaluations and drawing new investor interest.
- Strong and Improving Sales Growth: Revenue growth is firm and getting better. Year-over-year sales growth for the last quarter was 27.2%, after 20.9% in the previous quarter. Full-year revenue growth for the last reported period was 18%, a clear gain from 2.2% in the year before.
- Positive Analyst Changes: Analysts are noticing, with the average EPS estimate for the next fiscal year moved higher by 17.5% over the last three months. Rising estimates often come before more price gain as the market includes better expectations.
These fundamental points speak to the central idea of Minervini's growth investing: looking for companies where business momentum is improving, giving the energy for a maintained price trend.
Technical Condition and Setup Evaluation
Beyond the basic Trend Template rules, a full technical evaluation is key. ChartMill's own analysis gives KRMD a Technical Rating of 7 out of 10, stating it is in a good long-term trend. The summary notes that while KRMD has been a strong performer over the past year, some recent period of stability is seen. This is expanded in the linked Setup Rating, also a 7, which shows the stock is now trading in a smaller range with less movement after its earlier rise.
This period of stability is important for the Minervini method. It shows the possible forming of a "Volatility Contraction Pattern" (VCP), where the stock absorbs its gains on lower trading volume, preparing for a new price jump. The analysis finds a definite support area between $5.50 and $5.64, which would act as a sensible place for a stop-loss order, setting the trade's risk from the start.
For a full look at the support levels, trend study, and a sample trade setup, you can see the complete ChartMill Technical Report for KRMD.
Locating Like Possibilities
KRMD shows the kind of candidate that appears when looking for both technical trend force and fundamental growth improvement. For investors wanting to use this two-part method to find other possible chances, the set screen that found KRMD is ready to use. You can locate more stocks that fit this 'High Growth Momentum + Trend Template' requirements by using this screening link.
Disclaimer: This article is for information and learning only. It is not advice to buy or sell any security. The study is based on set screening rules and past data, which are not promises of future results. Always do your own full research, think about your personal risk comfort, and talk with a qualified financial advisor before making any investment choices.
