For investors looking to join strong growth with structured trend methods, the system created by Mark Minervini offers a clear structure. This method, called Specific Entry Point Analysis (SEPA), finds leading stocks by using strict technical and fundamental checks. The aim is to locate stocks already in strong upward moves, supported by improving business results, and to buy at exact, lower-risk moments. A main part of this system is the Minervini Trend Template, a list of technical conditions confirming a stock is in a clear, continuing uptrend. When this technical condition is combined with a company showing fast-growth speed, it forms a strong situation for investors aiming for major gains.
Technical Base: Following the Minervini Trend Template
The first part of the Minervini plan requires a very solid technical condition. POET TECHNOLOGIES INC (NASDAQ:POET) now shows a chart pattern that matches well with the needs of the Trend Template. This template is made to select for stocks in a clear Stage 2 rise, skipping those that are resting or falling.
A check of the main moving average conditions shows a positive arrangement:
- Price vs. Long-Term Averages: The last price of $6.83 trades well above both the rising 150-day SMA ($6.18) and 200-day SMA ($5.96). This meets the main template rules that price must be above these key averages, confirming the stock is in a long-term uptrend.
- Moving Average Arrangement: The shorter 50-day SMA ($6.61) is placed above the 150-day SMA, which is above the 200-day SMA. This ordered, rising sequence of averages is a standard sign of a good uptrend and shows increasing speed.
- Nearness to Highs: While the current price is about 27% under its 52-week high of $9.41, it sits a strong 121% above its 52-week low of $3.09. This shows major recovery and places it in a position of better performance, though for a pure Minervini breakout, one would look for a situation nearer to new highs.
- Relative Strength Position: Maybe most important, POET has a ChartMill Relative Strength (CRS) ranking of 90.4. This means it has done better than over 90% of all stocks in the market over the past year. Minervini states that real market leaders nearly always show high relative strength, often above 80 or 90, before their biggest price moves.
This technical picture indicates POET is in a clear uptrend with good market-relative results, meeting the necessary conditions for a stock deserving more study under this trend-following structure.
Fundamental Driver: The Argument for Fast-Growth Speed
Technical condition alone is not sufficient in the Minervini SEPA method, it must be supported by getting better fundamentals. The "High Growth Momentum" part of the search looks for companies showing very fast or speeding operational growth, which frequently acts as the driver for a continued price rise. POET’s recent financial numbers show several very fast growth signs.
The company is showing notable top-line speeding:
- Very Fast Revenue Growth: The latest quarter saw a huge year-over-year sales growth of 7,350%. While such a number can be affected by a small starting point, it is a sign of a business reaching a turning point. Also, the trailing twelve-month (TTM) revenue growth is 535.6%.
- Earnings Path: The EPS picture is changing. The last quarter showed a 50% year-over-year gain in earnings per share. Analysts are getting more positive, with the average EPS guess for the next year changed upward by 21.7% over the last three months. Such upward changes are a main part of the Minervini method, as they show growing institutional belief in the company’s profit possibility.
- Sector New Development: POET’s position as a maker of opto-electronic answers and its patented Optical Interposer system for AI and data centers puts it in the fast-growth semiconductor field. It is trying to solve bandwidth and delay issues, a main area in technology, giving a fundamental story that can draw major investor attention.
This mix of extremely fast revenue growth, a changing earnings picture, and work in a long-term growth market gives the fundamental "support" that can maintain a technical uptrend. For a fast-growth speed investor, these are the exact drivers one looks for.
Present Technical Condition and Situation Evaluation
According to ChartMill’s own analysis, POET’s overall technical condition is solid, getting a high Technical Rating of 9 out of 10. The report says the stock has been one of the better performers in the market over the past year and its short-term trend has lately become positive. However, the analysis also gives a note of care for immediate entry. The Setup Quality Rating is a medium 6, indicating that while the trend is strong, the recent price movement has been a bit unsteady and the stock is trading in the middle of its recent range. For a Minervini-style entry, one would usually want a more compact, steadier pattern (a Volatility Contraction Pattern) giving a more defined, lower-risk turning point.
The technical report finds several key support and resistance points that would be important for planning any trade. Support is found between $6.27 and $6.36 (mixing moving averages and trendlines), with more support near $6.02 and $5.64. Immediate resistance is noted around $7.45, then $7.94. A full list of these points and the complete analysis can be seen in the detailed POET technical report.
Summary
POET TECHNOLOGIES shows an interesting example at the meeting point of fast-growth speed investing and structured trend following. Its chart pattern follows the main ideas of the Minervini Trend Template, showing a stock in a clear uptrend with better relative strength. This technical condition is supported by fundamental drivers showing very fast revenue growth and positive analyst feeling, signs of a company that might be starting a fast-growth period.
For investors using a plan like Minervini’s SEPA, POET would deserve a spot on a watchlist. The present evaluation suggests looking for a more ideal situation, a steadier consolidation with a clearer breakout point, to better the risk/reward balance of any possible entry. The existing technical condition gives a positive setting, but waiting for the correct "specific entry point" is a main idea of the method.
Want to find more stocks that match this mix of fast-growth speed and strong technical trends? You can use the same search process with the High Growth Momentum + Trend Template screen on ChartMill.
Disclaimer: This article is for information and learning only. It is not meant as investment guidance, nor does it form a suggestion to buy, sell, or hold any security. The analysis is based on given data and certain investment methods, past results do not show future results. Always do your own study and think about talking with a qualified financial advisor before making any investment choices. Please read our full disclaimer here.