For investors looking for a mix of strong fundamental momentum and well-timed technical entry signals, a multi-layered screening method can be very useful. By merging ChartMill's own ratings, specifically looking for stocks with a High Growth Momentum (HGM) Rating above 4, a Technical Rating above 7, and a Setup Rating above 7, the process works to find companies showing solid earnings speed within clear uptrends that are now pausing, possibly ready for their next move up. This technique sorts for the "what" (fundamental growth) and the "when" (technical setup) in one step. One stock that recently appeared from this filter is Travere Therapeutics Inc (NASDAQ:TVTX).
Fundamental Growth Momentum
Travere Therapeutics tells a notable fundamental growth story, which is measured by its HGM Rating of 7. This number brings together several important momentum indicators that are vital for growth-oriented methods like CANSLIM, which look for firms with speeding up earnings and sales.
- Rapid Top-Line Growth: The company's revenue path is especially noticeable. Over the trailing twelve months (TTM), revenue has increased by more than 114%. More notably, recent quarterly sales growth displays clear speeding up:
- Most Recent Quarter (Q2Q): +162.1%
- Previous Quarter (Q-1): +111.5%
- Quarter Before That (Q-2): +97.5%
- Solid Bottom-Line Gain: While the company's EPS on a TTM basis is still negative at -$1.06, the year-over-year gain is large at +75.9%. The quarterly earnings view is even stronger, with the most recent quarter showing EPS growth of 140% compared to the same time last year.
- Positive Analyst Changes and Surprises: The momentum is being seen and supported by Wall Street. Analyst forecasts for next year's earnings have been moved higher by 56.6% over the last three months, a solid sign of belief in the future outlook. Also, the company has a record of beating forecasts, topping EPS estimates in three of the last four quarters by an average of 68.3%.
These items, speeding up sales, better earnings, positive surprises, and higher revisions, are exactly the parts the HGM Rating is built to measure, making TVTX a leading pick for momentum investors.
Technical Strength and Trend
A solid growth story must be supported by price action, and Travere Therapeutics does well here also, with a Technical Rating of 8. According to the detailed technical report, the stock shows several signs of a market leader.
- The long-term trend is plainly positive, with the stock trading well above its rising 50, 100, and 200-day simple moving averages.
- Its relative strength is very good, doing better than 95% of all stocks in the market over the past year and 81% of its group in the Biotechnology industry.
- The stock is trading in the higher part of its 52-week range, which went from $12.91 to $37.50, showing the strong uptrend that has seen shares rise about 97% over the past twelve months.
This high Technical Rating verifies that the fundamental momentum is being seen in continued buying interest and solid price performance, a main idea of momentum investing.
The Pause and Setup Quality
While being in a solid uptrend is key, finding a lower-risk entry point is important. This is where the Setup Rating of 7 becomes helpful. The technical study shows TVTX is now in a pausing stage after its large rise.
- Over the past month, the stock has been trading between about $33.45 and $37.50, forming a base.
- The report points out a clear support area around $33.88 and a close resistance area starting at $34.78.
- A recent "Pocket Pivot" signal, a price increase on higher-than-normal volume, hints that accumulation might be happening inside this range.
This pause, after a solid trend, forms a possible breakout setup. A move above the resistance area could indicate the restart of the uptrend, giving a clear entry point with a sensible stop-loss level just below support. This setup quality is what the screen looks for, trying to find strong stocks that are resting, not falling apart.
Finding Like Opportunities
The combination of solid growth numbers, a strong price trend, and a helpful pause pattern makes Travere Therapeutics a clear example of what this merged screening method tries to discover. For investors wanting to use this process to find other possible picks, the ready-made screen is available to use.
You can find more stocks that fit these rules for high growth momentum with a technical breakout setup by using this screen on ChartMill.
Disclaimer: This article is for information only and is not investment advice, a suggestion, or an offer to buy or sell any security. The study is based on given data and shows conditions at a specific time. Investing has risk, including the possible loss of money. Always do your own research and think about talking with a qualified financial advisor before making any investment choices.
