The Architecture of Mark Minervini's Stage 2 Trend Template
In Trade Like a Stock Market Wizard, U.S. Investing Champion Mark Minervini introduced the Trend Template as the non-negotiable quantitative filter of his SEPA (Specific Order Execution) strategy. Before analyzing earnings growth or chart patterns, every stock must first prove it is in a confirmed Stage 2 advancing phase.
Eliminate Downtrends
By mandating that price and intermediate moving averages trade above a rising 200-day SMA, you automatically avoid catastrophic Stage 4 declines.
Filter for Market Leaders
Requiring an RS Rating of 70 or higher ensures your watchlist is concentrated in top-quartile market performers rather than sluggish market laggards.
Prepare for VCP Entries
Only stocks passing the Trend Template possess the structural stability required to form valid Volatility Contraction Patterns with tight pivot buy points.
