For investors aiming to join strict technical rules with a focus on fundamental growth, the method created by Mark Minervini offers a strong framework. This approach, often called the SEPA (Specific Entry Point Analysis) strategy, methodically finds stocks showing both strong price trends and improving business results. The aim is to find leaders early in their large price moves by selecting for companies that are not only technically sound, trading near highs with ordered moving averages and high relative strength, but also showing better earnings and sales momentum. This two-part study aims to tell apart real market leaders from only short-term participants.
A real-world use of this thinking is the "High Growth Momentum + Trend Template" screen, which adds Minervini's strict technical checklist with a special High Growth Momentum (HGM) score. This screen looks for securities that are in clear, strong uptrends while also having the fundamental strength to keep that momentum. One stock now meeting this detailed filter is OLD SECOND BANCORP INC (NASDAQ:OSBC).
Technical Strength: Following the Minervini Trend Template
At its heart, the Minervini Trend Template is made to remove uncertainty and confirm a stock is in a clear, high-quality uptrend. OLD SECOND BANCORP INC now meets these important technical requirements, which are essential for the strategy.
- Trend Order: The stock's price is trading above all main simple moving averages (50-day, 150-day, and 200-day), and these averages are themselves in the right bullish order (50-day > 150-day > 200-day). This layered setup shows continued buying pressure across many time periods.
- Nearness to Highs: A key part of the Minervini method is to focus on strength, not weakness. OSBC is trading within 3% of its 52-week high of $22.43, showing it is a market leader, not a follower making up ground. Also, its current price is over 40% above its 52-week low, confirming a large and clear recovery trend.
- Relative Strength: The stock has a ChartMill Relative Strength (CRS) ranking of about 79, meaning it is doing better than nearly 80% of the wider market. High relative strength is a main sign of institutional interest and a common feature of the largest gainers.
This technical view shows why the Trend Template is important: it automatically selects for stocks already in a strong Stage 2 advance, thus raising the chance that an investor is following a current trend instead of trying to guess a turn.
Fundamental Momentum: The High Growth Filter
While the Trend Template confirms the "how" of the price move, the High Growth Momentum (HGM) score tries to explain the "why." For a stock to hold a strong trend, it usually needs the support of getting better business fundamentals. OSBC's recent financial performance displays several signs of this needed momentum.
- Earnings Improvement: The newest quarterly EPS grew by 28.6% year-over-year, a large improvement that hints at a positive business change. While yearly EPS growth stays negative because of earlier period comparisons, this sharp quarterly gain is exactly the kind of driver Minervini's strategy searches for to push the next part of a price rise.
- Strong Revenue Growth: Top-line growth is solid, with trailing twelve-month revenue up 18.9% and the latest quarter increasing 38.4% year-over-year. This shows the company is taking market share or effectively using new chances, giving a firm base for future profits.
- Analyst Trust: The average analyst estimate for next year's earnings has been moved higher by about 1.4% over the last three months. While small, upward changes often come before continued stock price strength as they show growing analyst trust in the company's future.
- Profitability: The company keeps good profit margins, with the last reported quarter at over 30%. Solid margins give protection against economic challenges and are a sign of well-run businesses.
These parts are important for the high-growth side of the strategy because they give the fundamental "story" that can draw continued institutional buying, supporting and lengthening the technical breakout found by the Trend Template.
Technical Health Summary
The given technical study report gives a short summary of OSBC's chart health. The stock gets a perfect Technical Rating of 10/10, showing very good strength across both short and long-term trends. It is doing better than most stocks in its industry and the wider market. The report states the stock is trading near the high of its recent one-month range, confirming its leader position.
However, the study also gives an important note for tactical entry: the Setup Quality rating is now a 3. This shows that while the trend is perfect, the stock may be stretched in the very short term and not in a tight consolidation pattern that gives a standard, lower-risk entry point. For investors following Minervini's rules, this suggests watching for a possible drop in volatility or move back toward support before a new entry point appears.
You can see the full, detailed technical study for OSBC here.
Finding Like Opportunities
OLD SECOND BANCORP INC gives an example of a stock that fits a strict growth-and-momentum investment framework. For investors interested in searching for other securities that meet this combined set of strict technical and fundamental growth rules, the "High Growth Momentum + Trend Template" screen is a sensible first step.
You can see the current results of this screen and find other possible candidates here.
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 screening methods. All investing includes risk, including the possible loss of principal. You should do your own complete research and think about talking with a qualified financial advisor before making any investment choices. Please read our full disclaimer here.