For investors looking to join strong growth with defined technical entry points, the method created by Mark Minervini offers a useful structure. This process, called the Specific Entry Point Analysis (SEPA), finds stocks that are in clear uptrends and supported by improving fundamental growth. The aim is to find market leaders early in their large price moves by using fixed technical filters, the Trend Template, with checks for earnings and sales momentum. This combined view helps tell apart real, lasting breakouts from short-lived rallies, seeking to take large gains while controlling risk with exact entry and exit rules.
Liquidia Corp (NASDAQ:LQDA), a biopharmaceutical company working on rare cardiopulmonary diseases, recently appeared through a scan made to find such chances. The scan uses Minervini’s Trend Template to confirm a stock’s technical condition is sound, while also needing a high score in ChartMill’s own High Growth Momentum (HGM) rating, which measures the force and durability of a company’s fundamental growth path.
Checking the Technical Base: The Trend Template
A central idea of the Minervini plan is to only invest in stocks showing clear, multi-level force. The Trend Template gives a list to check this, and a look at Liquidia’s chart and main numbers shows it currently passes these important technical tests:
- Trend Agreement: The stock’s price of $38.83 trades well above its rising 50-day ($37.07), 150-day ($30.33), and 200-day ($26.57) simple moving averages (SMAs). Also, the 50-day SMA is above the 150-day SMA, which is above the 200-day SMA. This ordered agreement is a classic sign of a firm, set uptrend across several timeframes, a required filter in the SEPA process to confirm one is buying into momentum, not trying to stop a fall.
- Nearness to Highs: LQDA’s current price is within 25% of its 52-week high of $46.67, about 17% below that top. Minervini notes that real market leaders often trade close to their highs, showing continued demand and little resistance above. At the same time, the price is a large 245% above its 52-week low of $11.26, showing strong recovery and trend force.
- Better Relative Strength: With a ChartMill Relative Strength (CRS) rating of 96.3, LQDA is doing better than 96% of all stocks. High relative strength is a key part of the plan, as it finds stocks that are leading the market higher, frequently a sign of more good performance.
This meeting of technical points indicates LQDA is in a confirmed Stage 2 climb, the exact period where Minervini’s work shows the largest gains are often taken.
Checking the Growth Driver: Fundamental Momentum
While the Trend Template makes sure the stock is in a good place on the chart, the High Growth Momentum rating tries to confirm there is a fundamental driver pushing that move. For a clinical-stage biopharma company like Liquidia, this is often measured by revenue change points, analyst opinion, and path-to-profitability numbers. The given data shows several large growth signs:
- Outstanding Revenue Speed: The most notable numbers are in top-line growth. Revenue over the past twelve months has grown by 1,031% year-over-year. More lately, sales growth for the last reported quarter grew a large 3,055% compared to the same quarter a year before. This kind of major speed is just what growth investors and the Minervini method look for, a fundamental catalyst that can draw institutional interest and support a continued price trend.
- Positive Analyst Changes: Forward-looking opinion is getting stronger. Analyst guesses for next year’s earnings have been moved up by 11.7% over the past three months, while revenue guesses for next year have been raised by 8.8%. Upward changes are an important part of the plan, as they show growing belief in the company’s future and often come before more institutional buying.
- Getting Better Bottom-Line Path: Although the company is not yet regularly profitable on a net basis, the trend is improving. The last reported quarter showed a profit margin of 15.8%. More importantly, earnings per share (EPS) growth is turning positive, with the last quarter showing 137% year-over-year growth and the next quarter guessed to grow by 174%. This move toward profitability on speeding revenue is a strong mix for high-growth investors.
These numbers show that LQDA is going through a fundamental shift, likely connected to the development and sale of its lead product candidate, YUTREPIA. This gives the real "story" and catalyst that the Minervini plan matches with technical force.
Technical Condition and Setup Summary
ChartMill’s own technical report gives Liquidia Corp a good Technical Rating of 8 out of 10, noting a positive long-term trend and better yearly performance versus its peers. The report confirms the stock’s leadership, stating it does better than 87% of stocks in the Pharmaceuticals industry. However, it also gives a note of care for immediate entry: the Setup Quality rating is currently a low 2. The report says that while the technicals are very good, the stock "does not present a decent entry opportunity at the moment," as prices have been stretched lately and would gain from a time of consolidation. This matches well with the Minervini idea of waiting for a defined, low-risk entry point, like a breakout from a volatility contraction pattern (VCP), instead of following a stock that has already made a big, continuous move.
For a full look at the support levels, trend study, and the reason behind the ratings, you can see the complete ChartMill Technical Report for LQDA.
Finding Like Chances
Liquidia Corp shows the kind of security that passes through a filter looking for both technical correctness and fundamental force. For investors interested in searching for similar candidates that meet the Minervini Trend Template and show high-growth traits, more study can be done using the set scan: High Growth Momentum + Trend Template Screen.
Disclaimer: This article is for informational and educational purposes only. It is not a recommendation to buy or sell any security. The analysis is based on provided data and a specific investment methodology. All investing involves risk, including the potential loss of principal. You should conduct your own research and consider consulting with a qualified financial advisor before making any investment decisions. Please read our full disclaimer here.