SCHWAB (CHARLES) CORP (NYSE:SCHW): A Strong Momentum Stock Aligning with Minervini’s Trend Model

SCHWAB (CHARLES) CORP (NYSE:SCHW): A Strong Momentum Stock Aligning with Minervini’s Trend Model

Mark Minervini’s trend-based strategy targets stocks showing clear upward movement, backed by both chart patterns and financial health. The method looks for stocks in Stage 2 uptrends, confirmed by moving averages, relative performance, and price stability, while also requiring solid earnings and revenue growth to ensure financial strength.

SCHWAB (CHARLES) CORP (SCHW) has been identified by a High Growth Momentum + Trend Model screen, which blends Minervini’s technical checks with a momentum score focused on growth. Here, we explain why SCHW fits this approach.

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Technical Fit: Aligning with Minervini’s Trend Model

SCHW meets all major technical points in Minervini’s Trend Model:

1. Price Above Important Moving Averages

   • The current price ($97.08) is higher than the 50-day ($92.06), 150-day ($83.68), and 200-day SMA ($82.00).
   • The 50-day SMA is above the 150-day and 200-day SMAs, showing a positive alignment.

2. Rising Moving Averages

   • The 150-day and 200-day SMAs are increasing, pointing to steady long-term movement.

3. Strong Price Action

   • The stock is within 2.5% of its 52-week high ($99.59) and 58.7% above its 52-week low ($61.16).

4. High Relative Performance

   • SCHW’s relative strength (RS) score of 88.21 means it beats 88% of all stocks, a sign of market leadership.

These details match Minervini’s focus on trading stocks in clear uptrends with institutional backing.

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Financial Strength: Growth Momentum

Beyond chart patterns, SCHW shows improving growth numbers, key for growth-focused investors:

• Earnings Growth

  • Quarterly EPS growth (Q2Q) jumped 56.16% YoY, with the previous quarter showing 40.54% growth.
  • Forward EPS estimates for the next quarter suggest 60.39% growth, reflecting strong analyst optimism.

• Revenue Growth

  • Revenue increased 24.75% YoY last quarter, a sharp rise from 3.13% in the prior quarter.

• Better Profit Margins

  • Net margins improved to 27.01% in the latest quarter, up from 25.82% in the prior quarter, showing better efficiency.

• Positive Estimate Changes

  • Analysts have raised next-year EPS estimates by 4.29% over the past three months, a positive sign.

These financials indicate SCHW is not only technically strong but also benefiting from business growth—a core part of Minervini’s strategy, which looks for stocks with both price and earnings improvement.

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Breakout Potential

ChartMill’s technical report gives SCHW a perfect 10/10 technical score, noting:

• A clear uptrend in both short and long-term periods.
• Stability near all-time highs, with support at $96.73 (a logical stop-loss point).
• Resistance at $97.09–$98.57, with a move above this range possibly leading to more gains.

The setup score of 7/10 highlights a manageable consolidation, offering a good risk/reward entry.

Read the full technical analysis here.

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Final Thoughts: A Strong Pick for Growth Traders

SCHWAB (CHARLES) CORP (SCHW) makes a strong case for investors using Minervini’s approach:

• Technically: It fits all Trend Model points, with strong moving averages, relative performance, and a positive chart setup.
• Financially: Improving earnings, revenue growth, and margin gains align with growth-focused investing.

For traders looking for similar opportunities, the High Growth Momentum + Trend Model screen can find other candidates.

Discover more high-growth momentum stocks here.

Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. Always conduct your own research and consider risk management strategies before trading.