The Mark Minervini Trend Template: How to Find Winning Stocks

Deepvue
Deepvue

November 20, 2023

11 min read
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What is the Minervini Trend Template?

The Mark Minervini Trend Template is a comprehensive checklist designed to identify stocks in strong uptrends with the potential for further gains. It is based on specific technical parameters that reflect strength, momentum, and institutional accumulation.

Screening for new trading ideas is a critical part of successful investing. It’s not just about spotting potential opportunities but also about analyzing stocks and setups to gauge the market’s overall health.

Mark Minervini, a two-time U.S. Investing Champion and the author of several top-tier trading books developed a simple yet powerful framework for this process: the Minervini Trend Template.

The Minervini Trend Template identifies stocks in strong uptrends by ensuring they are trading above key moving averages (50-day, 150-day, and 200-day SMAs) with those averages trending upward, and showing high relative strength compared to the market. It focuses on technical health, momentum, and signs of institutional accumulation to select stocks poised for superperformance.

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Detailed Criteria of the Minervini Trend Template

Price Above Moving Averages:

  • The stock’s price should be above its 150-day and 200-day simple moving averages (SMAs). This indicates the stock is in an uptrend both in the medium and long term, ensuring you are trading with the trend.

150-Day SMA Above the 200-Day SMA:

  • A rising 150-day SMA above the 200-day SMA confirms that the stock has been outperforming for a significant period and that the longer-term trend is strengthening.

Price Above 50-Day SMA:

  • The stock should also be trading above its 50-day SMA, which demonstrates short-term strength and suggests that the stock is not just in a long-term trend but also exhibiting recent momentum.

200-Day SMA Trending Up:

  • The 200-day SMA must have been rising for at least one month. A rising 200-day SMA signifies that the long-term trend is positive and reflects sustained institutional interest.

Price Strength:

  • The stock’s price must be within 25% of its 52-week high. This ensures the stock is not too far from its recent highs and is demonstrating leadership relative to the broader market.

Relative Strength:

  • The stock should have a high Relative Strength (RS) Rating—Minervini often looks for RS ratings of 70 or higher (using proprietary tools like Investor’s Business Daily’s RS ratings or other metrics) to focus on stocks outperforming their peers and benchmarks.

Volume Pattern:

  • The stock should show signs of accumulation by institutions, which might be visible through:
    • Increasing volume on up days.
    • Declining volume on down days.
    • Tightly coiling price patterns indicate that demand is outstripping supply.

Market and Sector Alignment:

  • The stock should belong to a leading sector or group, as institutional investors often concentrate their buying in specific hot sectors.

Symbol: APP
Company:
Applovin Corporation
Year: 2024

minervini trend template

Why The Minervini Trend Template Works

The Minervini Trend Template works because it systematically identifies stocks exhibiting strong technical health, momentum, and institutional accumulation—factors that historically precede significant price increases. By requiring stocks to trade above key moving averages, show relative strength, and confirm volume patterns of demand, the template ensures traders focus on market leaders poised for outperformance while avoiding lagging or weak stocks.

By requiring stocks to trade above their 50-day, 150-day, and 200-day moving averages, the template ensures that candidates are in established uptrends, eliminating weak or declining stocks. The alignment of the 150-day SMA above the 200-day SMA signals accelerating price trends, while a rising 200-day SMA for at least one month confirms sustained long-term strength.

The template also emphasizes the importance of volume patterns, looking for signs of institutional buying, which drives significant price moves. Key signals include increased volume on breakouts, low volume during pullbacks, and sustained high-volume up days, indicating accumulation and strength.

Focusing on stocks near their 52-week highs avoids lagging performers and prioritizes those in leading sectors that attract concentrated institutional interest. The requirement for high relative strength ensures the stock is outperforming the broader market and peers, a hallmark of leading stocks during superperformance cycles.

These criteria are grounded in historical analysis of top-performing stocks, which share these characteristics before making substantial gains. The Minervini Trend Template removes emotional decision-making, guides traders to high-probability setups, and ensures alignment with broader market momentum, making it a proven and effective tool for identifying stocks with significant growth potential.

How to Gauge Market Health With The Minervini Trend Template

Monitoring stocks to gauge market health involves analyzing specific indicators and behaviors that provide insight into the overall condition of the market.
A healthier market will have many more stocks in strong stage 2 uptrends that are trending constructively or forming sound bases.

Paying Attention to Leadership Stocks is crucial for gauging market health and identifying high-probability trading opportunities. Leadership stocks are typically the best-performing stocks in strong sectors, demonstrating superior relative strength and institutional demand.

Leading stocks often act as a bellwether for the overall market. When leaders are advancing strongly, it reflects a healthy market environment. Conversely, when leaders fail or falter, it may indicate underlying weakness.

Observing the Percentage of Stocks Above Moving Averages is a valuable way to gauge the broader market’s health and momentum. This metric reflects the overall participation of stocks in an uptrend or downtrend, helping traders assess whether market conditions are favorable or deteriorating.

A high percentage of stocks trading above their moving averages (e.g., 50-day or 200-day) indicates strong breadth, meaning a larger proportion of stocks are participating in the market’s uptrend. Conversely, a low percentage shows weak breadth, often signaling a narrow or deteriorating market where fewer stocks are driving index performance.

Why Healthy Market Conditions Matter

Winning stocks typically perform best in bull markets or strong uptrends when the overall market is rising. A rising tide lifts most boats, and even fundamentally strong stocks may struggle in bearish or sideways markets.

The Minervini Trend Template favors bull markets when sentiment is positive, and institutional buyers are more likely to deploy capital creating favorable conditions for breakouts and trends to succeed. Conversely, in bear markets fear and uncertainty dominate, increasing the likelihood of failed breakouts, heightened volatility, and sharp declines.

Adhering to tighter stops, reducing position sizes, or staying in cash can preserve capital during unfavorable market conditions, such as corrections or bear markets. Recognizing poor market conditions helps traders avoid unnecessary losses by stepping aside rather than forcing trades.

In favorable market conditions, stocks that meet the Minervini Trend Template criteria often display amplified momentum, as institutional buying aligns with broader market strength, increasing the chances of superperformance.

Symbol: NVDA
Company: Nvidia Corp
Year: 2024

Minervini Trend Template

How Group Moves Strengthen Conviction

When multiple stocks within the same industry or sector show similar bullish patterns or breakouts, it indicates broader institutional interest and strengthens the likelihood that the move is sustainable. If multiple stocks in a sector break out simultaneously, it confirms that the sector is experiencing a fundamental or macroeconomic tailwind, such as new regulations, product innovations, or increasing demand.

The Minervini Trend Template demands strong Group Moves as they often indicate that large institutions, such as mutual funds or hedge funds, are accumulating stocks in a particular sector. Institutions rarely buy just one stock; they spread their investments across a group to diversify and capture the overall trend.

Group strength minimizes the likelihood of isolated false breakouts. If only one stock in a sector breaks out, it might be due to stock-specific news. But if several stocks in the group break out, it points to a broader trend.

Symbol: TSLA
Company:
Tesla, Inc
Year: 2020

The Mark Minervini Trend Template: How to Find Winning Stocks

TSLA 2020 was the leader of the EV group which yielded many super-performance stocks

How to Use The Minervini Trend Template in Deepvue

We’ve built multiple variations of these criteria into Deepvue Screen Presets so that you can load The Minervini Trend Template in one click.

In Deepvue, you can use built-in screen presets to simplify the process. Just head to Presets > Top Traders > Minervini to load the Minervini Trend Template criteria in one click.

minervini trend template screener
Add Minervini’s 1 Month Trend Criteria Screener to Your Deepvue Account: Link

The variation you choose depends on your trading style and preferred setups.

  • 3–5 Month Trend: Ideal for identifying mature bases and more stable uptrends.
  • 1-2 Month Trend: Perfect for spotting early-stage moves and explosive power plays.

💡 Pro Tip: As you run the screener, monitor how many stocks pass the criteria. A high number of strong setups typically indicates a healthy market, while fewer passing stocks suggest caution.

Why Focus on VCP Setups?

Minervini doesn’t just buy anytime when the stock is in an uptrend. He also looks for ideal entry spots on a chart, as characterized by a Volatility Contraction Pattern (VCP) setup, to pinpoint high-potential trades. The VCP setup reflects the diminishing supply of shares available for sale and growing demand, which often precedes a strong breakout.

The VCP setup occurs as price volatility contracts with each pullback, creating clearly defined support and resistance levels. This narrowing range allows traders to enter positions near breakout points with minimal risk, as stop-loss levels can be placed just below recent consolidation lows.

Volatility contraction reflects seller exhaustion, with fewer shares being sold during each successive pullback. As the supply dries up, the path of least resistance becomes upward, often leading to a powerful price breakout when demand exceeds supply.

The compact nature of the VCP allows traders to achieve a favorable reward-to-risk ratio by entering close to breakout points and capturing significant price moves with relatively small initial risk.

Symbol: NIO
Company:
Nio Inc
Date: August 2020

The Mark Minervini Trend Template: How to Find Winning Stocks

Why Do Fundamentals Matter

Fundamentals, like Quarterly Earnings and Sales, provide the underlying reasons for a stock’s long-term price performance, offering insight into the company’s financial health, growth potential, and competitive position. While technical analysis helps identify when to buy or sell, strong fundamentals ensure that the stock has the potential for sustainable growth and attracts institutional investors.

Institutional investors, such as mutual funds and pension funds, rely heavily on fundamental analysis to select stocks. Their participation drives large, sustained price moves.

A stock’s price can rise temporarily due to hype or market speculation, but only companies with robust fundamentals can sustain long-term upward trends. Metrics like earnings growth, revenue growth, and profit margins show whether a company is genuinely expanding and capable of delivering shareholder value.

Fundamentally strong companies are better equipped to weather economic challenges, maintain profitability, and adapt to changing conditions. This resilience often leads to less volatile price behavior compared to weaker companies.

How The Minervini Trend Template Helps You Succeed

The Mark Minervini Trend Template identifies stocks with strong technical health, momentum, and institutional accumulation, focusing on those above key moving averages and showing high relative strength and positive volume patterns. This methodical approach eliminates weak stocks, aligns with market trends, and has proven effective in selecting stocks poised for substantial gains by reducing emotional trading and emphasizing high-probability setups.

The Minervini Trend Template is a powerful tool for traders seeking high-quality stocks with strong uptrends. It simplifies the process by focusing on:

  • Price vs. Moving Averages: The stock price must be above the 50-day, 150-day, and 200-day SMAs, showing both short and long-term uptrends.
  • SMA Alignment: The 150-day SMA should be above the 200-day SMA, indicating a strengthening trend.
  • Relative Strength: Stocks should outperform the market, with high RS ratings.
  • Institutional Interest: Volume should be increasing on up days while decreasing on down days.

Gauging market health with the Minervini Trend Template involves monitoring stocks for indicators like the number in strong uptrends and the performance of leadership stocks, which reflect overall market conditions. A high percentage of stocks trading above key moving averages suggests a healthy market with broad participation, whereas a low percentage indicates weak market breadth.

Healthy market conditions are crucial as they foster an environment where winning stocks can perform well, with positive sentiment driving institutional buying and successful breakouts. Conversely, in bear markets, recognizing these conditions allows traders to adjust strategies to avoid losses, focusing on capital preservation through tighter stops or cash positions.

Focusing on Volatility Contraction Patterns (VCP) setups is key because they pinpoint optimal entry points for trading, signaling diminishing supply and increasing demand which often leads to significant price breakouts. This pattern allows traders to enter trades with a favorable risk-reward ratio due to the clear support levels for setting stop-losses and the potential for substantial gains as the stock breaks out from its consolidation phase.

Fundamentals matter because they reveal the financial health, growth potential, and competitive standing of a company, which are critical for long-term stock performance and attracting institutional investment. While technical analysis might indicate the timing for trading, it’s the strong fundamentals that ensure a stock’s price can sustain and grow over time, providing a solid foundation for value creation and stability against market fluctuations.

Frequently asked questions

The Minervini Trend Template is a checklist of technical criteria designed to identify stocks in strong uptrends with high potential for further gains. It ensures stocks are trading above key moving averages (50-day, 150-day, and 200-day SMAs), with high relative strength, positive volume patterns, and signs of institutional buying. This method works because it systematically filters for technically healthy stocks that align with market leaders, eliminating weak or declining stocks.

The template requires stocks to trade above their 50-day, 150-day, and 200-day SMAs. Additionally, the 150-day SMA must be above the 200-day SMA, and the 200-day SMA should be trending upward for at least a month. These criteria confirm the stock is in a strong, sustained uptrend and indicate growing institutional interest.

Relative strength measures a stock’s performance compared to the broader market or its peers. The template prioritizes stocks with high relative strength ratings (70 or higher) to focus on market leaders that consistently outperform. This ensures traders concentrate on stocks with momentum and leadership potential.

You can assess market health by monitoring the number of stocks passing the Minervini criteria. A high number suggests a strong market with broad participation in uptrends. Leadership stocks, which are top performers in leading sectors, also act as indicators. If leaders are advancing, the market is likely healthy; if they falter, it could signal weakness.

VCP setups identify optimal entry points by signaling diminishing supply and increasing demand. As price ranges tighten with each pullback, traders can enter near breakout levels with minimal risk. This pattern often precedes strong price moves, offering a favorable reward-to-risk ratio and higher chances of success.

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