Earnings momentum + relative strength: the two-part filter I use before any swing trade
I used to screen purely on technicals — breakouts, RSI, moving average crossovers — and kept getting chopped up by moves that looked right but had no real reason behind them. What changed things for me was adding a fundamental filter *before* the technical one, not instead of it.
The combo I use now:
**1. Earnings momentum first.** Is the company's quarterly earnings growth accelerating, not just positive? A stock growing earnings 15% → 25% → 40% quarter over quarter tells a very different story than one growing 40% → 25% → 15%, even if the most recent number looks similar.
**2. Relative strength second.** Is the stock outperforming the broader market over the last 3-6 months, not just moving in absolute terms? A stock up 10% while the market's up 15% is actually a laggard, even though the chart "looks" fine.
**3. Then, and only then, the technical setup.** Breaking out of a real base (weeks/months of consolidation) on above-average volume — not a random one-day pop.
The order matters. Technicals-only gives you a lot of stocks that are moving for no durable reason, and they tend to give the move back just as fast. Fundamentals-only gets the "why" right but you end up entering way too early or too late on timing. Doing both cuts out a lot of the noise.
Curious how others here sequence their filters — anyone lead with technicals and add fundamentals after, or is earnings-first fairly common?