About This Strategy
An adaptation of Mark Minervini's SEPA method for PSX: a strict Trend Template filter isolates stage-2 uptrends, then Volatility Contraction Pattern (VCP) detection finds tightening bases with a defined pivot buy point, ranked by relative strength.
Strategy Summary
The strategy runs in two stages. Stage 1 demands a stock already in a confirmed uptrend (price above rising 150/200-day averages, near 52-week highs, strong RS rating). Stage 2 looks for the VCP signature: successive pullbacks that get progressively shallower as supply dries up, setting a pivot for the breakout entry.
Qualification Criteria
- Price above the 150-day and 200-day moving averages, with the 200-day rising
- Price within striking distance of the 52-week high and well off the 52-week low
- Relative Strength rating in the top tier of the market
- Successive contractions, each shallower than the last
- Volume drying up through the base, with a defined pivot price
VCP bases show supply being absorbed: each pullback is bought sooner and shallower than the last. When price clears the pivot on expanding volume, the path of least resistance is up — with risk defined just under the final contraction low.
Who This Strategy Is For
- Experienced traders who follow SEPA / CANSLIM-style methods
- Breakout traders who want higher-quality bases, not every breakout
- Position traders looking for leaders near highs
- Traders who rank candidates by relative strength
Trading fit
The strategy runs in two stages. Stage 1 demands a stock already in a confirmed uptrend (price above rising 150/200-day averages, near 52-week highs, strong RS rating). Stage 2 looks for the VCP signature: successive pullbacks that get progressively shallower as supply dries up, setting a pivot for the breakout entry.
No names are firing right now, but the setup rules remain visible for the next market cycle.
Historical context for this strategy is still being wired into the desk.
How It Works
Filter the market with the Trend Template (MAs, 52-week range, RS rating)
Detect contraction sequences: progressively shallower pullbacks
Require volume to contract through the base
Set the pivot at the high of the final contraction
Buy the pivot break; stop under the final contraction low
Advantages
- Two-stage filter keeps only the strongest candidates
- RS ranking focuses on market leaders
- Defined pivot entry and tight, logical stop
- Proven framework adapted to PSX data
Disadvantages
- Very selective — signals can be rare in weak markets
- Requires patience to wait for the pivot
- Failed breakouts happen in choppy conditions
- Needs understanding of base structure to manage well
Live PSX results
Use this section to see whether the strategy is only educational or currently producing live PSX candidates. Live strategies show fresh scan results, while the backtest block below provides historical context where available.
How to use this strategy on PSX
Check Market Overview and Money Flow first so you know whether PSX breadth, flow, and sector leadership support this setup type.
Use the price, structure, and confirmation columns together. These strategy pages are designed to improve selection quality, not to replace execution and risk management.
Backtests help you understand expectancy, hold time, and drawdown behavior. They should sharpen judgment, not turn a setup into a guaranteed trade.
Related PSX strategies
Compare this setup with similar strategies in the same difficulty bucket to see whether trend, breakout, pullback, or confluence logic fits your process better.
Research note: Live scan results are pulled from the backend strategy feed. Always validate context, liquidity, and risk before trading.