The method for finding good investment chances often joins strict technical study with basic growth measures. One recognized way is Mark Minervini's Trend Template, which methodically finds stocks in clear uptrends by looking at price movement, moving averages, and relative performance. This technical structure is then combined with a search for strong growth momentum, looking for companies that show quickening earnings, solid sales increases, and better profit margins. The pairing tries to find stocks that are both technically healthy and have the basic reasons for possible future price gains.
Technical Soundness and the Trend Template
THERAPEUTICSMD INC (NASDAQ:TXMD) shows a strong technical view that fits well with the requirements of the Minervini Trend Template. The template's main aim is to sort for stocks showing definite, continued uptrends over various periods, making sure an investor only looks at assets with confirmed momentum and institutional interest.
A look at the given data indicates TXMD satisfies these technical conditions:
- The present price of $1.64 is higher than its important moving averages: the 50-day SMA ($1.25), 150-day SMA ($1.22), and 200-day SMA ($1.15).
- Importantly, all these moving averages are in clear uptrends, confirming continued buying interest. The 50-day SMA is also higher than both the 150-day and 200-day SMAs, showing good alignment and increasing momentum.
- The stock's price is about 134% higher than its 52-week low of $0.70, meeting the need for a major recovery and possibility for growth.
- With a 52-week high at $2.44, the present price is inside the template's favored distance, being within 25% of this high, which can point to leadership and a lack of price obstacles above.
- The stock's relative strength score of 90.83 is very good, showing it does better than over 90% of all stocks. Strong relative performance is a key part of the Minervini method, as it finds market leaders that often do well in rising markets.
Basic Reasons for Strong Growth Momentum
Besides a technically healthy chart, the Minervini method stresses the value of basic business acceleration. Stocks with strong growth momentum are usually marked by fast earnings and sales growth, which can be a reason for more price gains. TXMD displays a number of these high-growth traits.
The company's newest financial results indicate a notable betterment:
- Earnings Quickening: The earnings per share growth on a trailing twelve-month (TTM) basis is 91.26%. More notably, the growth rate when looking at the newest quarter compared to the same quarter last year is 151.70%. This fast quickening is a main feature looked for by growth investors.
- Sales Increase: Revenue growth is similarly solid, with TTM sales growth of 156.16%. The most recent quarterly sales growth jumped by 306.84% year-over-year, signaling a strong enlargement of the business.
- Profitability Betterment: The company's profit margin in the last reported quarter was 57.88%, a major number that, if kept, suggests good operational efficiency and pricing ability.
These basic measures are important because, as Minervini's method points out, "big earnings attract big attention." A company that surprises the market with quickly rising profits and sales often pulls in institutional interest, which can support a continued uptrend.
Technical Condition and Setup Overview
The given technical study report for TXMD gives a combined view of its market position. The stock gets a high technical score of 9 out of 10, mirroring its good and steady performance across both short and long-term periods. The report states that both the short-term and long-term trends are positive, and the stock is a front-runner in its industry, doing better than most of its pharmaceutical counterparts.
About its trade setup, the report gives a fair setup score. It signals that the stock has been moving in a range lately, which can form a possible entry chance, and states there is minimal price resistance above the present price. The study also finds a few important support levels under the current price, which can aid in planning risk management.
For a detailed look at the support levels and a possible trade setup, you can examine the full technical analysis report for TXMD.
Locating Comparable Chances
The pairing of a good technical base and quickening basic growth makes TXMD a notable candidate for methods based on Minervini's ideas. For investors looking to find comparable chances, methodical screening is necessary.
You can find more stocks that meet these strict technical and high-growth momentum requirements by using the 'High Growth Momentum + Trend Template' screen on ChartMill.
Disclaimer: This is not investment advice. The content is meant for information and learning only. It is very important to do your own research and think about your personal financial position and risk comfort before making any investment choices. Please read our full disclaimer and terms of use to know our responsibilities.
