Investors aiming to benefit from market trends often use methods that combine business quality with chart-based timing. One such tactic involves looking for solid growth stocks that are also showing favorable chart breakout formations. The reasoning is dual: first, to find firms with good basic business condition and rising profits, and second, to choose a moment for investment when the stock's price movement indicates it may be starting an upward move, leaving a period of sideways trading. This technique tries to join the lasting possibility of a growth narrative with the nearer-term signal of better market feeling and price movement.
Ollie's Bargain Outlet Holdings Inc (NASDAQ:OLLI) recently appeared from a search made to locate this specific mix. The retailer, recognized for its "Good Stuff Cheap" slogan, runs an increasing number of closeout stores in the United States. As a possible growth stock, its attraction rests in a simple expansion story and a model focused on value that works in different economic conditions.
Fundamental Growth Outline
The base of this tactic is finding companies with clear and lasting growth. Based on the fundamental analysis report for OLLI, the company receives a good Growth Rating of 7 out of 10. This rating is backed by good past results and positive outlooks.
- Past Results: In the last year, revenue rose by 12.58%, while earnings per share (EPS) went up by 11.18%. The view over a longer time is also positive, with average yearly revenue growth of 10.04% and EPS growth of 10.78% over recent years.
- Future Outlooks: Experts predict a rise in this growth path. Revenue is anticipated to grow by 13.17% each year in the next few years, and EPS growth is estimated at 16.37% per year. The report states that both revenue and earnings growth rates are rising, a main feature wanted by growth investors.
- Earnings and Condition: Backing this growth story are acceptable scores in financial condition and earnings. The company keeps a very good balance sheet with little debt, leading to a Health Rating of 7. Its Profitability Rating of 6 is supported by good return figures and margins that do better than many others in the busy broadline retail sector.
This fundamental setting is important. A chart breakout carries more weight if it happens in a company that is financially sound and increasing its earnings foundation, instead of one seeing a brief, speculative rise.
Chart Formation and Breakout Possibility
While fundamentals give the "why," chart study gives hints on the "when." The technical analysis report for OLLI gives a Setup Rating of 8 out of 10, showing a positive chart formation for possible entry, even with a medium total technical rating of 4.
The present chart view shows a stock that is moving sideways after a time of decrease, forming a foundation for a possible upward move. Main points include:
- Direction Change: The near-term direction has lately become positive, hinting at gathering speed, even as the longer-term direction stays without a clear trend.
- Sideways Movement and Lower Swings: The stock has been changing hands in a set range over the last month, with price swings becoming smaller. This kind of price activity often comes before a notable move in one direction.
- Main Price Barrier: A clear price barrier sits just above the present price, between about $117.67 and $119.51. This area is created by a mix of trend lines and average prices.
- The Formation: The tactic points out a breakout chance. A continued move above this price barrier, especially with more shares traded, could indicate the beginning of a new upward direction. The report proposes such a breakout may act as a possible point to enter, with a price support area near $109.63 giving a sensible place to set a protective stop-loss order.
Price Assessment Points
No review is whole without looking at cost. The price assessment numbers show a varied view for OLLI. Its Price-to-Earnings (P/E) ratio is high next to the market average, which is common for companies with better-than-average growth outlooks. However, when including its predicted earnings growth rate, the PEG ratio points to a more fair price. For growth investors, a higher price can be acceptable if the company regularly meets, or beats, its high growth goals. The search's concentration on "solid growth" naturally agrees that these companies are seldom the lowest-priced in the market, choosing growth rate and speed over low price.
Why This Mix Is Significant
Connecting to the central tactic, the link between OLLI's fundamental and chart reports is what makes it notable. The good growth rating verifies the company is growing its business at a pleasing rate, which is the main force for long-term stock gains. The high setup rating implies that after a time of sideways movement, the market may be ready to revalue the stock and acknowledge this fundamental advance. A breakout above the price barrier would be a chart-based confirmation that buying is overcoming selling, possibly giving a well-timed entry point matched with the fundamental growth narrative.
This search tries to find stocks where the fundamental story is good and the market is starting to respond to it. You can review more stocks that match this outline of "Solid Growth Stocks with positive Technical Setup Ratings" by using the pre-set search on ChartMill.
Disclaimer: This article is for information only and is not investment guidance, a suggestion, or a bid or request to buy or sell any securities. The review shown is based on data and reports present when written. Investors should do their own complete study and think about their personal money situation and risk comfort before making any investment choices. Past results do not show future outcomes.
