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80% Gain in Seven Days With Minimal Risk: How I Find and Trade a Typical Minervini Breakout Setup.

By Kristoff De Turck - reviewed by Aldwin Keppens

Last update: Nov 15, 2023

Myomo position trade setup

In this blogpost, I am going to share with you a typical 'Minervini-setup' from my own portfolio. The setup is one that rolled out of one of my screens on Friday, November 3, 2023, after the stock market closed.

Mark Minervini Screens

All Minervini screens are saved in my personal ChartMill account so I can easily access them from the Stock Screener page.

The Trend Template Screen and the Basic Minervini Screens 1 to 6 are all available as predefined Trading Ideas in ChartMill.

Subscreens 1A, 1B, 2A,... are extensions of the basic screens that also take into account earnings/revenue surprises and revisions. You can find these in this article: 'Mark Minervini Strategy | Think and Trade Like a Champion Part 1 | Technical and Fundamental Filters'.

From here I can quickly check the various screens for any interesting setups. Myomo Inc. met the Basic Minervini Screen 1A :

  • Technical Template Screen
  • EPS Growth Q2Q at least 25%
  • EPS acceleration at least 2Q's
  • EPS Surprise filter (at least 2 beats in the last 4Q's)

As seen on the daily chart on the left, MYO is quoting above both the SMA50, SMA150 and SMA200.

All SMA’s are nicely sequenced (SMA50 above SMA150 and SMA150 above SMA200).

Volatility Contraction Pattern Myomo setup

The weekly chart on the right shows that the stock suffered a severe downturn in 2022, eventually bottoming out as of late October/early November 2022. This is the transition from a stage 4 *(capitulation) *to a stage 1 (consolidation).

In late August, early September 2023, there was an upward breakout that caused the stock to show the first cautious characteristics of a premature stage 2 (accumulation). I also noticed the large order blocks in phase 1 on the weekly chart, a typical indication of early accumulation by institutional parties eagerly buying shares.

The daily chart on the left shows the first consolidation phase (actually an inversed Head and Shoulders Pattern) in the fledgling stage 2 and the corresponding pivot point.

Below is the actual setup after the weekend, before market opening on Monday, November 06, 2023.

Myomo setup

Because this was a first (test) position in the stock, the risk was kept to 0.5% of the total account size. The initial target is at twice the initial risk, $1.87 (2R). When that level is reached, the stop-loss is moved to breakeven.

In the meantime, seven trading days have passed and this is the daily chart for Friday, Nov. 10, 2023.

Myomo setup 2

The breakout was powerful and had very high volume compared to the previous days. Moreover, the price breakout was confirmed by the fact that the price immediately continued to rise the following day. This is always a good sign and proof of momentum.

Already after only two days, the first price target was met which led to the stop-loss being changed to breakeven (for the full position).

Meanwhile, the price has risen 12 days in a row and there are clear signs of a parabolic rise (price has risen more than 80% since entry) . The current share price stands at $2.57, giving a profit of 5.5R+. I am holding this stock as a position trade, but I am raising the stop-loss to $2.00, protecting about 2.6R profit.

How I continue to manage this trade can be followed via my Twitter page where I also follow up on other setups that come from one of the Minervini screens.

Be sure to follow our official ChartMill Twitter account as well!



NYSEARCA:MYO (12/8/2023, 9:00:59 AM)


-0.05 (-1.22%)

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