In the field of growth investing, few methods are as orderly and strict as the one supported by Mark Minervini. His approach, called the Specific Entry Point Analysis (SEPA), is a strict mix of technical and fundamental study meant to spot leading stocks just as they start large price gains. The central technical structure is the Trend Template, a group of fixed rules that confirms a stock is in a strong, confirmed uptrend. This is then combined with an emphasis on solid and quickening fundamental growth in earnings and sales. The aim is not to locate inexpensive stocks, but to locate the top-performing stocks, those with the greatest chance of providing large returns. A "High Growth Momentum + Trend Template" scan uses this precise thinking, sorting the market for firms that are both technically sound and showing the fundamental strength that usually supports continued upward moves.
OLD NATIONAL BANCORP (NASDAQ:ONB) is a financial holding company and commercial bank serving clients across the Midwest and Southeast. A recent scan using Minervini's two-part method has noted ONB as a stock that deserves more study from growth-focused investors, as it seems to meet the strict needs of both trend and momentum.
Meeting the Minervini Trend Template
The Trend Template is the first filter in Minervini's method, made to remove all but the soundest technical patterns. It requires agreement across several moving averages and price levels to verify a stock is in a good Stage 2 rise. Using the given data, ONB shows a positive technical position:
- Price Above Key Averages: The present price of $24.43 trades above the rising 50-day ($22.72), 150-day ($22.04), and 200-day ($21.77) simple moving averages (SMAs). This ordered agreement is a standard sign of positive momentum across all periods.
- Moving Average Order: The 50-day SMA is above both the 150-day and 200-day SMAs, and the 150-day SMA is above the 200-day SMA. This sequence confirms the uptrend is confirmed and gaining speed.
- Nearness to Highs: At $24.43, ONB is trading within 1.4% of its 52-week high of $24.78. Minervini notes that real market leaders reach new highs; they do not stay far from them. Also, the stock is about 45% above its 52-week low, showing a solid recovery trend is already active.
- Relative Strength: With a ChartMill Relative Strength (CRS) score of 71.41, ONB is doing better than more than 71% of the market. While Minervini usually looks for scores above 80 for top leadership, a score above 70 meets the basic requirement and implies the stock is maintaining its position, especially as it tests new highs.
This technical view meets the central list of the Trend Template, implying ONB is not in a temporary rise but a planned uptrend, the needed base for any SEPA-based trade.
The High Growth Momentum Fundamentals
Clearing the technical scan is only part of the process. Minervini's thinking centers on the concept that "large earnings draw large notice." The biggest stock moves are nearly always supported by strong fundamental quickening. The given data points show ONB is displaying several important growth traits that match this idea:
- Solid Earnings Growth: The company is showing notable year-over-year earnings momentum. The latest quarter's EPS increased by 26.5% compared to the same quarter last year, and the prior quarter saw a stronger 28.3% growth. This recent quickening is a good sign.
- Sound Revenue Growth: Top-line growth is also notable, with last quarter's sales rising 41.0% year-over-year. This shows the company's growth is fueled by expanding business size, not just reducing costs or financial moves.
- Positive Earnings Surprises: ONB has exceeded analyst EPS estimates in each of the past four quarters, with an average beat of 3.69%. Steady positive surprises often lead to higher estimates and greater institutional attention.
- Good Forward Estimates: Analysts are predicting continued strength, with next quarter's EPS expected to grow 36.6%. While analyst changes over the past three months have been slightly positive for earnings, the existence of solid forecasts supports the growth story.
For a growth investor, this mix of quickening earnings, rising revenue, and a record of beating estimates is exactly the type of fundamental "support" that can maintain a technical breakout and push a stock much higher.
Technical Condition and Setup Review
A look at the given technical study report gives a combined view of ONB's market stance. The report gives the stock a high Technical Rating of 8 out of 10, noting its good long- and short-term trends and its trade near 52-week highs. The summary states the stock has been trading in a broad range over the past month but is currently testing the top part of that range.
However, the report also gives a note of warning for immediate entry, giving a Setup Rating of 5. It shows that while the technical condition is very good, recent price action has been "a little bit too volatile to find a nice entry and exit point" and proposes waiting for a period of stability. This is a key difference in the Minervini structure: a strong trend is needed, but a defined, lower-risk entry point is what divides a good stock from a good trade. The report spots clear support areas below the present price, which would become key zones for handling risk if a more defined setup appears.
You can review the complete, detailed technical study for ONB in the ChartMill Technical Report.
A Candidate for More Study
OLD NATIONAL BANCORP presents a strong case for investors using a strict growth and momentum method. It meets the important points of the Minervini Trend Template, confirming a participating uptrend. More significantly, it supports this technical strength with fundamental growth measures, particularly in revenue and earnings quickening, that are the signs of possible market leaders.
The present review implies the stock may be stretched in the short term, waiting for a better volatility reduction pattern for a lower-risk entry. This matches well with the strategic patience Minervini supports. For investors, ONB acts as a clear example of how mixing strict technical filters with fundamental growth scans can reveal possible chances deserving of a spot on a watchlist for future setup formation.
Interested in locating more stocks that meet this strict growth and momentum standard? You can use the same "High Growth Momentum + Trend Template" scan yourself to review present market chances. Click here to access the screening tool and see the latest results.
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 provided data and a specific investment methodology. All investing involves risk, including the potential loss of principal. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
