In the effort to find stocks with the possibility for major price gains, many investors use organized methods that combine strict technical study with basic growth measures. One well-known method is the strategy made popular by Mark Minervini, which focuses on finding stocks in strong upward moves—what he calls Stage 2—while also requiring solid business momentum. This method is not about locating inexpensive stocks, but about locating the correct stocks at the correct moment: those showing better price strength, backed by speeding earnings and sales growth. An additional view for this search is the High Growth Momentum (HGM) rating, which measures a company’s basic growth path. When a stock satisfies the strict rules of the Minervini Trend Template and also receives a high score on growth momentum screens, it offers a strong argument for more study by investors focused on growth.
A Technical Base: Following the Minervini Trend Template
The Minervini Trend Template gives a clear, rules-based structure to make sure a stock is in a verified, long-term upward move before review. It works as a quality screen, removing weak or sideways stocks to concentrate only on those with proven strength. LSB Industries Inc (NYSE:LXU) now shows a technical position that matches these main principles.
- Trend Agreement: The stock is trading above all its important simple moving averages (SMAs), the 50-day ($12.55), 150-day ($10.05), and 200-day ($9.56). Also, these averages are in the correct bullish order: the 50-day SMA is above the 150-day and 200-day SMAs, and the 150-day SMA is above the 200-day SMA. This layered setup shows continued buying pressure across several time periods.
- Nearness to Highs: A central part of the Minervini idea is to concentrate on strength, not weakness. LXU’s present price is about 185% above its 52-week low of $4.92, showing a strong recovery and upward move. While it is now about 19% below its 52-week high of $17.22, it stays within the planned range that implies the current trend is still active.
- Better Relative Strength: Maybe most revealing is the stock’s ChartMill Relative Strength (CRS) score of 96.16. This means LXU has done better than 96% of all stocks in the market over the past year. Minervini states that real market leaders show high relative strength, as it points to institutional interest and a stock’s capacity to separate from general market declines.
This technical picture implies LXU is working in a Stage 2 rise, the main phase where the largest gains are often made. The template’s goal is to factually spot such situations, taking feeling out of the first choice step.
The Growth Driver: High Growth Momentum Basics
While a strong chart is important, Minervini’s strategy states it must be based on a base of solid and getting better basics. The "High Growth Momentum" part of the screen looks for companies showing speed increase in their main financial measures. LXU’s recent financial results point out several zones of strong growth.
- Fast Earnings Path: The company’s newest quarterly earnings per share (EPS) jumped 52.6% compared to the same quarter last year. Even more convincing is the future estimate, which expects EPS growth of 177.8% in the next quarter. This type of planned speed increase is a main force that can push more price gains.
- Steady Sales Growth: Top-line growth stays solid, with last quarter’s sales rising by 22.3% year-over-year. This adds to a good full-year sales growth rate of 17.8%. Experts have also become more positive about future sales, changing their next-year sales estimates higher by 11.6% over the last three months.
- Getting Better Profitability: The company’s profit margin has shown clear improvement from one quarter to the next, going up from 1.99% two quarters ago to 9.77% in the newest quarter. This widening shows not just growing sales, but a growing ability to turn those sales into net income—a sign of working efficiency and possible price strength.
- Earnings Surprise Record: LXU has exceeded expert EPS estimates in three of the last four quarters, with an average beat of almost 30%. A record of positive surprises can build trust with investors and lead to higher changes in future estimates, creating a positive cycle for the stock price.
These basic points give the "reason" behind the stock’s strong technical results. They imply the price trend is being driven by real business gain, not just guesswork.
Technical Condition and Present Position
According to ChartMill’s own study, LXU is given a high Technical Rating of 9 out of 10, confirming its general solid technical condition and positive long-term trend. The report states the stock does better than 96% of its group in the Chemicals industry and has shown a steady pattern of increasing prices. The long-term trend is rated as positive, though the short-term trend has lately become neutral as the stock settles some of its gains.
The Setup Quality rating is now a 5, meaning that while the longer-term trend is very good, the stock is in a time of settling inside its recent trading range. For a trend-following plan, this can offer a possible chance, as settlements often come before the next step higher. The technical report finds several support levels below the present price, which can help outline risk, and a main resistance area between $14.85 and $15.01.
A full list of all technical parts, support, and resistance levels is ready in the complete ChartMill Technical Report for LXU.
End and More Study
LSB Industries Inc offers a case where a convincing technical trend, as described by the Minervini Trend Template, meets strong basic growth momentum. The stock’s agreement above its main moving averages, outstanding relative strength, and strong earnings and sales speed increase make it a candidate deserving of addition to a growth investor’s watchlist. The present settling phase, after a large upward move, gives a point to review for a possible restart of the trend.
It is key to recall that screening is the first stage. Any possible investment needs more careful study, including a review of the wider market situation, industry forces, and company-specific risks and drivers.
Want to find other stocks that match this mix of strong trends and high growth? You can use the same “High Growth Momentum + Trend Template” screen yourself using this link: High Growth Momentum + Trend Template Screen on ChartMill.
Disclaimer: This article is for information and learning only. It is not a suggestion to buy or sell any security. The study is based on given data and certain screening methods. All investing includes risk, including the chance of loss of original money. You should do your own study and talk with a qualified financial advisor before making any investment choices.