For investors aiming to join strict technical rules with a focus on fundamental expansion, a method mixing Mark Minervini's Trend Template with high-growth momentum screens presents a strong framework. This process first finds stocks showing the clear, strong uptrends Minervini supports, confirming they are in a Stage 2 advance with notable institutional backing. It then adds a filter for high-growth momentum, looking for companies showing quickening earnings and sales growth,the fundamental driver that frequently pushes the largest price movements. This two-part method tries to seize leaders early in their expansion cycles while they are still technically healthy, mixing chart power with business results.
Morgan Stanley (NYSE:MS) appears as a present candidate from this mixed screening method, offering a case study in how an established financial institution can show the traits commonly linked with high-growth momentum candidates, all inside a solid technical setup.
Technical Base: Following the Minervini Trend Template
The foundation of Minervini's strategy is the Trend Template, a group of fixed technical rules made to filter for stocks in verified, strong uptrends. Morgan Stanley's chart now meets these requirements, showing continued institutional buying.
- Trend Position: The stock trades above all main moving averages (50-day, 150-day, and 200-day), and these averages are ordered positively,the 50-day above the 150-day, and the 150-day above the 200-day. This order confirms an upward trend across several timeframes.
- Nearness to Highs: A central Minervini rule is to concentrate on strength, not weakness. MS is trading within 3% of its 52-week high of $181.98, showing leadership and momentum instead of trailing in a rebound. At the same time, its present price is about 87% above its 52-week low, marking a large and confirmed advance.
- Better Relative Strength: The stock has a ChartMill Relative Strength (CRS) ranking of 87.57, meaning it is doing better than almost 88% of the wider market. Minervini states that real market leaders regularly show high relative strength, as it points to steady demand over supply.
This technical view indicates the stock is in a sound Stage 2 uptrend, the period where Minervini's work shows the largest gains often happen. The strict trend-following part of the strategy helps to avoid buying declining stocks and instead follows confirmed momentum.
Fundamental Driver: The High-Growth Momentum Picture
While the Trend Template makes sure a stock is technically prepared, the High Growth Momentum (HGM) rating tries to find the fundamental reason for the movement. For Morgan Stanley, this is not about uncertain expansion but a shown, strong quickening in profitability.
- Earnings Quickening: The most notable numbers are in earnings per share (EPS) growth. Year-over-year EPS growth is at a strong 45.3%, with the latest quarter jumping 48.9% compared to the same time last year. This quickening is a main sign for momentum investors, hinting at better business conditions.
- Estimate Changes: Analyst opinion is supporting this positive trend. The average estimate for next year's EPS has been moved higher by over 11% in the past three months. Such upward changes are a vital part of growth momentum strategies, as they often come before more institutional buying and price gains.
- Steady Performance: The company has exceeded EPS estimates in all of the past four quarters, with an average beat of 19.1%. This steady capacity to beat expectations builds trust and can maintain investor belief.
- Gaining Profitability: Beyond revenue growth, Morgan Stanley is changing revenue into earnings more effectively. The profit margin in the last reported quarter was 14.3%, a clear gain from 11.6% in the previous quarter, showing positive operating effects.
These measures go past simple value or stability cases for a financial leader. They show a picture of a company going through a strong rise in its earnings capacity, which is exactly the kind of fundamental driver that matches with the growth-centered side of this mixed strategy.
Combination: Growth Inside a Trend
The combined effect of this screen is clear in MS. The Trend Template confirms the price is responding to these fundamental gains in a steady, controlled way,it is not a shaky, speculative jump. The high-growth numbers give the fundamental reason for the technical breakout, suggesting the trend is based on a base of real earnings momentum instead of only sentiment.
This mix handles a main risk in momentum investing: buying advanced stocks without a fundamental reason. Here, the growth measures give a basis for the trend, while the fixed technical rules give clear guidelines for risk control, including set entry points and stop-loss points based on the chart setup.
Technical Condition Summary
ChartMill's own technical report gives a short summary, giving Morgan Stanley a full Technical Rating of 10 out of 10. The report states the stock is in a positive long-term and short-term trend, strongly doing better than both the wider market and its Capital Markets industry group. It notes several confirmed support areas below the present price, starting near $164, which can act as guide points for possible declines. The main near-term resistance is found in the $177-$180 range. The report ends that while the technical condition is very good, the present Setup Quality rating is medium, meaning the stock might gain from a time of pause before giving a new, lower-risk entry point for traders.
A complete look at the technical analysis, including full support and resistance points, is in the ChartMill Technical Report for MS.
Locating Related Chances
Morgan Stanley shows the kind of security this mixed screen tries to find: fundamentally sound, technically healthy leaders. Investors wanting to use this method to locate other possible candidates can inspect the preset screen directly. Click here to view the current "High Growth Momentum + Trend Template" screen results on ChartMill.
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 data and a specific screening method, investors should do their own complete research and think about their personal risk tolerance before making any investment choices. Past performance is not a guide for future results.
