Entries: Mark Minervini's 

SEPA ® Analysis


  • Stocks must satisfy the Trend Template
  • A series of filters based on earnings, sales and margin growth, relative strength, and price volatility are then applied.
  • 95% of trending stocks will fail the filters.
  • Those that pass are matched against the Leadership Profile
  • This includes both fundamental and technical factors
  • The final stage is a manual review, using the following characteristics:
  • Reported earnings and sales
  • Earnings and sales surprise history
  • Earnings per share (EPS) growth and acceleration
  • Revenue growth and acceleration
  • Company-issued guidance
  • Revisions of analysts’ earnings estimates
  • Profit margins
  • Industry and market position
  • Potential catalysts (new products and services or industry- or company-specific developments)
  • Performance compared with other stocks in same sector
  • Price and trading volume analysis
  • Liquidity risk

The process is designed to identify potential for:

  • Future earnings and sales surprises and positive estimate revisions
  • Institutional volume support
  • significant buying demand
  • Rapid price appreciation based on a supply/demand imbalance lack of selling vs buying

The Trend Template

Our JS-TechTrading strategy includes a number of non-negotiable criteria. We always trade in line with a confirmed uptrend, in line with the saying 'The Trend is your Friend'. The reason for that is that the probability that a stock continues a confirmed up- or downtrend is always higher than the probability for a trend-change. By doing that, we also respect Newton’s 1st law, which says any kind of object in motion tends to stay in motion, unless external forces are applied. We only consider to put a stock on our watchlist in case the following criteria are being met:

  • The 50d, 150d and 200d Moving Averages are in a stable uptrend
  • The 150d MA is above the 200d MA
  • The 50d MA is above the 150d MA
  • The stock price is trading above the 150d MA
  • The stock price is trading above, or at least close to the 50d MA
  • Up-days are on higher volumes, contrasted by lower volumes on pullbacks
  • More up-weeks on high volume than down-weeks on high volume. This volume confirmation is a sign of accumulation which means that institutional money is flowing into the stock. 
  • The Relative Strength of the stock is in the top quartile of the overall stock market. 

This is all to find the “Probability Convergence” – 

the point with the lowest risk and the highest potential for reward.