For investors aiming to achieve notable capital gains, a method that merges the force of technical breakouts with the core soundness of fundamental growth can be an effective path. This process looks for stocks that are not only showing firm and quickening earnings and revenue expansion—a sign of traditional growth investing—but are also displaying favorable price movement, like periods of stability close to important price ceilings that hint at a possible upward move. By selecting for stocks with good fundamental condition and profit scores, the method works to find companies with the financial durability to maintain their growth paths, thus offering a firm base for the technical momentum to develop.
One stock that recently appeared from this kind of multi-factor filter is Progyny Inc (NASDAQ:PGNY), a specialized benefits management company in the fertility and family building sector. The stock represents an instance where strong fundamental growth measures meet a technical price formation that frequently comes before notable price changes.
Fundamental Growth Strengths
Fundamentally, the filtering method favors companies with clear and maintainable growth, which is the main driver for long-term stock gains. Progyny’s fundamental report, which you can examine fully here, shows a company performing well on several important fronts:
- Notable Revenue Growth: The company has achieved a high average yearly revenue growth of 38.42% over recent years, a definite sign of firm demand for its services and effective market reach. While future growth is anticipated to slow, analysts still forecast a sound 8.83% average yearly rise.
- Quickening Earnings Path: More critical, the growth is affecting profits. After a time of slower earnings-per-share (EPS) growth, analyst projections indicate a strong re-acceleration, with EPS expected to grow by almost 33% yearly in the next few years. This change from past results to a better outlook is a key sign for growth investors.
- Financial Soundness: A growth narrative is only possible if the company is financially stable. Progyny does very well here, receiving a high Health Rating of 9 out of 10. The company has no debt and has very good liquidity measures, giving it the steadiness to fund future growth without the burden of financial pressure.
- Profitable Business: Backing its growth, Progyny holds firm profitability, with a rating of 7. Its return on invested capital (ROIC) has risen to 11.24%, showing effective use of capital to create earnings.
These measures together describe a company that is securing a larger market, increasing its profitability, and doing so from a state of very good financial health—a standard profile for a solid growth stock possibility.
Technical Formation for a Possible Move
While fundamentals give the "why," technical analysis aids in seeing the "when" by studying supply and demand forces in the stock's price. As stated in Progyny’s technical analysis report (found here), the stock is showing a favorable formation.
The stock has been moving sideways in a band between about $24 and $29 over the last month, after a large rise earlier in the quarter. This time of lower volatility and lateral movement after a climb is frequently a signal of balance, where the stock prepares for its next price move. The technical report notes a clear support area between $24.02 and $24.82, made by a combination of moving averages and trend lines. The stock now trading near the top of this support zone suggests the period of stability may be ending.
The filter specifically searches for such formations, as a clear move above the nearby resistance area (about $25.45 to $25.89) could indicate a return of the longer positive trend and draw more momentum-focused buying. The setup rating of 8 out of 10 shows this possibility, stating that the period of stability has created a specific risk point just under the current price.
Why the Blend is Important
This combined method reduces main risks found in single-method strategies. Investing based only on a technical breakout can be risky if the company lacks fundamental quality; the breakout may not hold if earnings are poor. On the other hand, buying a strong growth stock based only on fundamentals can demand waiting if the market view or technical position is poor. By needing both, the method looks for companies where fundamental momentum is probable to be seen and valued by the market soon, as indicated by the favorable price formation. Progyny’s mix of quickening earnings forecasts, a very strong balance sheet, and a technical formation ready for a move makes it a relevant example of what this filter tries to find.
Locating Comparable Prospects
Progyny shows the kind of prospect this mixed growth-and-technical method tries to find. For investors wanting to see other stocks that now fit similar conditions of firm growth, sound fundamentals, and favorable technical formations, you can view the pre-set filter here: Discover More Strong Growth Stocks with Good Technical Setups.
Disclaimer: This article is for information only and is not financial advice, a suggestion, or an offer or solicitation to buy or sell any securities. The analysis uses data and reports thought to be dependable, but its correctness is not guaranteed. Investing has risk, including the possible loss of initial investment. You should perform your own research and talk with a qualified financial advisor before making any investment choices.
