The method used to find possible investment choices joins a strict technical system with attention to fundamental growth momentum. This process is guided by the ideas of well-known trader Mark Minervini, whose Trend Template is made to find stocks showing solid, confirmed uptrends. By sorting for securities that fit these defined technical conditions, such as trading above important moving averages and displaying strong relative performance, the filter separates stocks with positive price momentum. This technical base is then combined with a High Growth Momentum (HGM) rating, which assesses a company's earnings and sales speed, profit margin direction, and changes in analyst estimates. The pairing aims to locate companies not just in a good technical state but also showing the fundamental traits that have come before major price gains.
Motorsport Games Inc-A (NASDAQ:MSGM) appears as a security that satisfies this two-part filter, offering an example of fitting both a momentum-focused technical plan and a growth-focused investment idea.
Technical Fit with the Minervini Trend Template
A central idea of the Minervini plan is to invest following a confirmed trend, steering clear of the problems of trying to buy a declining asset. The Trend Template's moving average arrangement is a main instrument for this, making sure a stock is in a definite Stage 2 advance. MSGM's present chart formation shows a clear fit with these rules:
- Price Above Important Moving Averages: The stock's last price of $4.22 trades well above its rising 50-day ($3.75), 150-day ($3.12), and 200-day ($3.11) simple moving averages. This meets the template's need for the price to be above all three averages, verifying a multi-timeframe uptrend.
- Positive 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 ordered, upward-sloping arrangement of averages points to continued buying interest and a sound trend formation.
- Nearness to Highs: MSGM's price is now within 25% of its 52-week high of $5.41 and is a large 478% above its 52-week low of $0.73. Minervini stresses that real market leaders often reach new highs, not bounce back from severe lows. This measure shows the stock is behaving like a leader, having already completed a strong recovery and now pausing near its top.
- Better Relative Performance: With a ChartMill Relative Strength (CRS) score of 98.34, MSGM is performing better than about 98% of all stocks in the market over the past year. Strong relative performance is a strict filter in the Trend Template, as it finds securities that are wanted irrespective of wider market activity.
Fundamental Argument for High Growth Momentum
While the technical view prepares the situation, the Minervini method places great importance on fundamental speed as the reason for continued moves. The High Growth Momentum rating measures this part, and MSGM shows several notable data points:
- Very High Earnings Growth: The company has shown notable year-over-year earnings per share (EPS) growth. Its TTM EPS growth is at 179.6%, and recent quarterly comparisons show rises of 116.9% (last quarter) and 356.3% (two quarters ago). This sequence of increasing, triple-digit growth is precisely what growth investors and momentum plans look for, as it frequently draws institutional interest and leads to new valuations.
- Firm and Getting Better Profitability: Profit margins are solid and have shown notable firmness. The last reported quarterly profit margin was 21.8%, after a margin of 25.5% the quarter before. Even more notably, the yearly profit margin for the last reported fiscal year is 61.3%. Improving margins on growing sales can be a strong reason for share price gains, showing operational efficiency and pricing ability.
- Firm Revenue Growth: Top-line growth backs the bottom-line surge. Revenue growth on a TTM basis is 30.0%, with the most recent quarter increasing 95.4% year-over-year. This verifies that earnings growth is not only a result of reducing costs but is supported by actual business growth.
Technical Condition and Formation Summary
ChartMill's own technical report gives a combined view of MSGM's position. The stock receives a complete Technical Rating of 10/10, showing very good condition across measured factors including trend firmness, moving average order, and relative performance. Its Setup Rating is 7/10, showing the stock is coming out of a pause phase inside its uptrend, possibly giving a specific entry point. The report notes lower volatility during this pause and finds a main resistance area near $4.85. A clear move above this point could indicate the next part of the trend.
For a full look at the support/resistance points and the automated trade formation indicated by this study, readers can see the complete ChartMill Technical Report for MSGM.
Locating Comparable Chances
MSGM shows the kind of chance this joined filter intends to find: a company with strong fundamental momentum entering a clear technical uptrend. Investors curious about using this systematic process to locate other choices that satisfy the Minervini Trend Template and show High Growth Momentum can examine the preset filter directly: High Growth Momentum + Trend Template Screen.
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 numerical filters, which are not assurances of future results. Investing includes risk, including the possible loss of principal. Always do your own complete research, think about your financial position and risk comfort, and talk with a qualified financial advisor before making any investment choices.