In the search for stocks with high potential, many investors combine detailed technical study with fundamental growth filters. One well-known method is supported by Mark Minervini, a two-time U.S. Investing Champion, whose plan depends on his Specific Entry Point Analysis (SEPA). This process finds stocks showing clear upward price movements, backed by solid and improving fundamental growth, just as they appear ready for their next major price increase. The aim is to join the early part of a strong momentum move while carefully controlling risk. A real-world use of this idea involves looking for stocks that first pass the strict rules of Minervini’s Trend Template, confirming a technically correct uptrend, and then adding a filter for high growth momentum to find companies with the fundamental strength to continue that movement.
Technical Base: Matching the Minervini Trend Template
For a stock to be reviewed under the Minervini plan, it must first meet a set of fixed technical rules called the Trend Template. This template is made to find stocks already in a clear Stage 2 uptrend, staying away from downtrends and sideways patterns. TC Energy Corp (NYSE:TRP) now shows a match with many of these important technical points:
- Trending Moving Averages: The stock’s price is above its rising 50-day ($61.79), 150-day ($56.10), and 200-day ($54.24) simple moving averages (SMAs). Importantly, the 50-day SMA is above the 150-day SMA, which is above the 200-day SMA. This order is a clear sign of a good, structured uptrend.
- Nearness to Highs: A main Minervini idea is to focus on strength. TRP’s current price is about 43% above its 52-week low and within 5% of its 52-week high of $65.57. This shows the stock is acting as a leader and is not far from its highest point.
- Strong Relative Strength: The stock has a ChartMill Relative Strength (CRS) ranking of 78.37, meaning it has done better than almost 78% of the market over the last year. Minervini notes that real market leaders usually have RS rankings above 70, best in the 80s or 90s.
This technical picture indicates TRP is in a clear uptrend with support from large investors, satisfying the basic "trend" part of Minervini’s SEPA plan. It passes the first check, making sure traders only review stocks with a favorable trend.
Fundamental Driver: Meeting High Growth Momentum Standards
While a good chart is necessary, Minervini’s plan gives similar importance to fundamental improvement. The idea that "big earnings attract big attention" means the largest price moves are often driven by strong gains in a company’s financial results. The High Growth Momentum (HGM) rating is a combined measure that reviews these changes. TRP’s recent fundamental data shows several areas of notable improvement:
- Large Quarterly Earnings Growth: The latest quarter shows a year-over-year EPS growth of 88.46%. This type of fast improvement is what growth momentum investors and Minervini look for, as it can cause a new valuation and draw buying from institutions.
- Strong Revenue Momentum: Backing the earnings jump, quarterly sales growth was a very high 206.47%. While a number this large can be affected by unique events or comparisons, it clearly shows a strong positive change in revenue.
- Positive Estimate Revisions: Analysts have raised their revenue estimates for the next year by 0.09% over the past three months. Increases in estimates are a key sign of growing belief in a company’s future, a point Minervini watches.
- Good History of Beating Estimates: The company has exceeded analyst EPS estimates in two of the last four quarters and revenue estimates in three of the last four, with an average revenue beat over 2%. This repeated history of doing better than expected builds trust with the market.
These factors add to the stock’s qualifying HGM rating. For Minervini, this fundamental situation provides the "energy" for the technical "movement." The mix indicates the recent price trend may be supported by real business gains, not just speculation.
Present Technical Position and Risk Points
According to ChartMill’s own analysis, TRP currently has a strong Technical Rating of 8 out of 10, confirming its status as a technically sound stock in an uptrend. Adding to this, it has a Setup Quality Rating of 7, showing the stock is in a phase of holding steady after its recent rise. The technical report states that prices have been easing back in a narrow band over the past month, possibly forming a volatility contraction pattern (VCP), a setup Minervini looks for to find lower-risk entry points.
The analysis finds clear support near the $57.50-$58.20 area, with firmer support around $53.00-$53.80. A clear move above the recent holding pattern could point to the next phase of the uptrend. You can see the complete, detailed technical review for TRP here: ChartMill Technical Analysis Report for TRP.
Locating Comparable Situations
TC Energy Corp offers an example of a stock that fits a strict growth-and-momentum filtering process. For investors wanting to find other companies that currently match both the Minervini Trend Template and show High Growth Momentum traits, a ready-made screen exists. This tool regularly searches the market for similar combined setups.
Review the present list of matching stocks here: High Growth Momentum + Trend Template Screen.
Disclaimer: This article is for information and learning only. It is not advice to buy or sell any security. The analysis uses current data and a particular investment method, but market conditions shift quickly. Always do your own complete research, think about your personal risk comfort, and talk with a qualified financial advisor before making any investment choices. Please read our full disclaimer here.