ASX Model Book #1: How Five Stocks Delivered 800%+ Returns Through Momentum Trading

Why Most Australian Traders Miss the Biggest Winners

If you've ever watched a stock rocket 800% and thought "I should have seen that coming," you're experiencing one of momentum trading's most valuable lessons. At Finer Market Points, our systematic analysis of ASX market leaders reveals a recurring pattern: the biggest winners aren't mysterious outliers—they follow predictable setups that can be learned and recognised.

This analysis examines five standout ASX companies that delivered extraordinary returns over the past two years: Clarity Pharmaceuticals (CU6.ASX), Droneshield (DRO.ASX), Spartan Resources (SPR.ASX), WA1 Resources (WA1.ASX), and Nuix (NXL.ASX). Each stock demonstrates the systematic approach that separates profitable momentum trading from hopeful speculation.

Understanding these patterns builds the confidence to recognise similar setups before they become obvious to the broader market.

Gary Glover and Christopher Hall break down the complete technical analysis of these market leaders

The Universal Truth About Market Leaders

The world's most successful momentum traders share a common practice: they study previous market winners obsessively. This isn't nostalgia—it's systematic research. As demonstrated in our analysis, every significant market leader follows similar technical and psychological patterns before launching into major moves.

The key insight from studying these five stocks: "there are certain things that we do see over and over again in the setups". These recurring patterns provide the educational foundation for identifying future opportunities.

The 100% Rule That Changes Everything

One of the most counterintuitive discoveries from analysing market leaders is what we call the "100% Rule." The best momentum traders have learned that stocks showing relative strength versus the rest of the market, particularly after moving 100% or more, often have additional significant moves ahead.

Most retail investors think: "It's already doubled—I've missed it." Professional momentum traders think: "It's showing the strength characteristics of a potential multi-stage winner."

Case Study 1: Clarity Pharmaceuticals (CU6.ASX) - The Biotech Breakout

Clarity Pharmaceuticals exemplifies how systematic momentum analysis identifies multi-stage opportunities. This Australian biopharmaceutical company, specialising in radio pharmaceutical products for cancer treatment, demonstrates the classic leader progression.

The Setup Pattern

CU6 showed the textbook momentum sequence: an initial 100%+ move from 36 cents to 78 cents, followed by a consolidation period, then a systematic breakout pattern. The critical educational element: this wasn't random price movement but a predictable technical sequence.

The volume analysis reveals the psychology behind the moves. Strong impulsive volume on advances, very light volume during pullbacks—exactly what momentum traders want to see. This volume signature indicates institutional accumulation rather than retail speculation.

The Relative Strength Advantage

The timing advantage becomes clear when examining market context. CU6's consolidation occurred precisely during October 2022 market lows, showing relative strength when most stocks were making new lows. This relative performance provides a crucial edge: "within two weeks of the market low, the leaders are at near highs".

For Australian momentum traders, this insight transforms approach: instead of buying weakness, focus on stocks making higher lows during market stress.

Case Study 2: Droneshield (DRO.ASX) - Defence Technology Momentum

Droneshield's progression illustrates how sector themes amplify momentum characteristics. As global drone usage expanded, particularly following geopolitical developments, DRO positioned itself as a defensive technology leader.

Multiple Entry Opportunities

The stock provided several classic momentum entry points: initial relative strength showing, consolidation with light volume, then systematic breakouts at new highs. Each setup offered risk-managed entry opportunities for systematic traders.

The educational principle: momentum leaders often provide multiple chances for positioning, contrary to the "one chance only" mindset that causes hesitation.

The 52-Week High Strategy

Perhaps the most counterintuitive lesson from DRO's analysis: "even just waiting for the 52-week high to be broken and then buying then—that's often good enough as well". This challenges conventional wisdom about buying at "high" prices.

The logic becomes clear when studying leader behaviour: stocks reaching new highs after proper base-building often continue significantly higher. The psychological comfort of "getting a good price" frequently conflicts with momentum trading success.

Case Study 3: Spartan Resources (SPR.ASX) - Mining Momentum Excellence

Spartan Resources provides perhaps the clearest example of how news flow interacts with technical momentum in Australian mining stocks. The company's transformation from Gascoyne Resources to a focused gold development play created the fundamental backdrop for technical momentum.

The Announcement-Momentum Cycle

The systematic progression of drilling results created sustained momentum: each positive announcement built upon previous technical strength, creating a reinforcing cycle. This pattern repeats across successful mining momentum plays.

The educational value: understanding how fundamental catalysts align with technical setups provides confidence during volatile periods that inevitably accompany mining stock momentum.

Volume Analysis Mastery

The volume signature throughout Spartan's advance teaches crucial lessons about momentum sustainability. "When the stock's running up, everyone's enthusiastic, the volume's pretty robust, and then it goes sideways the volume dries up—we just don't see the selling there".

This volume pattern—strong on advances, light on pullbacks—provides real-time feedback about whether momentum remains intact or is deteriorating.

The Psychology of Missing Momentum Moves

One of the most valuable insights from studying these leaders addresses the psychological barriers that prevent traders from capturing momentum moves. As one member put it: "I was tired of buying stocks just as they peaked". This fear of buying "too late" consistently causes missed opportunities.

The solution lies in understanding that momentum leaders often provide their best returns after initial moves that seem "too late" to conventional thinking. The key is systematic entry criteria rather than price-based hesitation.

Building Confidence Through Education

FMP members consistently report that studying historical patterns builds the confidence necessary for momentum trading success. Understanding that current setups match proven historical patterns reduces the emotional stress of entering positions that "feel" expensive but are technically sound.

Take Your Momentum Trading Further

The concepts covered here form the foundation of successful ASX momentum trading. FMP YouTube members access comprehensive momentum trading education through weekly analysis, community discussions, and our complete video library. Our systematic approach monitors market patterns to identify educational opportunities for building trading confidence.

Members receive detailed analysis through our weekly educational content, community access for educational discussions, and our complete library of momentum trading education videos covering systematic learning pathways through trading education.

This Week's 3030 Report Features: → Current ASX stocks displaying the same relative strength patterns as CU6, DRO, and SPR → Sector rotation insights showing which themes are gaining institutional attention → Volume analysis tools for identifying accumulation versus distribution phases → Step-by-step process for recognising the next potential 800%+ winner

Complete Educational System: → 800+ video library covering every momentum concept demonstrated in these case studies → Weekly live analysis applying these principles to current market conditions→ Member community for discussing specific setups and sharing experiences

Early Access Advantage: → Launch Pad opportunities 24+ hours before public release → Member-only alerts for significant technical developments → Priority consideration for specific stock analysis requests

[ACCESS THIS WEEK'S MOMENTUM ANALYSIS - BECOME A YOUTUBE MEMBER]

Watch how members use Thursday's 3030 List to identify the best momentum stocks before market close, giving them first-mover advantage on ASX leaders

Current members save 24+ hours on momentum opportunity identification while building systematic trading confidence through proven educational frameworks.

Key Takeaways

The insights from analysing these five market leaders highlight fundamental momentum trading principles that apply across market conditions. Remember that relative strength analysis and systematic entry criteria form the foundation of successful momentum trading on the ASX.

For Australian traders, understanding how local market dynamics affect momentum patterns provides a significant advantage. The specific characteristics demonstrated by CU6, DRO, SPR, WA1, and NXL offer a systematic approach to identifying similar opportunities before they become obvious to the broader market.

These patterns repeat because they reflect underlying market psychology and institutional behaviour that remains consistent across different stocks and time periods. Building confidence in recognising and acting on these setups transforms momentum trading from speculation into systematic skill development.

FMP members receive additional insights through our weekly 3030 Report, released Fridays, featuring detailed analysis of current momentum leaders and Launch Pad opportunities. Members also have the opportunity to submit specific requests for analysis of stocks showing potential leader characteristics, for educational purposes.

Continue developing your momentum trading education by exploring our related content on volume analysis techniques, sector rotation patterns, and risk management frameworks specific to Australian momentum trading conditions.

Disclaimer: Finer Market Points Pty Ltd, CAR 1304002, AFSL 526688, ABN 87 645 284 680. This general information is educational only and not financial advice, recommendation, forecast or solicitation. The historical returns of 800%+ discussed in this analysis are past performance examples and do not predict or guarantee future investment results. Consider your objectives, financial situation and needs before acting. Seek appropriate professional advice. We accept no liability for any loss or damages arising from use.