Identifying Volatility Contraction Patterns (VCPs) in Deepvue

The Volatility Contraction Pattern (VCP) is a powerful technical analysis pattern developed by Mark Minervini to identify stocks with bullish potential and minimal risk. It's a price pattern that forms during a consolidation phase within a longer-term uptrend. VCPs are characterized by tightening price ranges and decreasing volume over time, signifying a potential breakout.

Recognizing VCPs

The key characteristic to look for is a price movement that contracts from left to right within the consolidation base. This tightening price range suggests a shift in the supply and demand dynamics. As the price movement tightens, it indicates that sellers are drying up and institutional buyers are accumulating shares.

Volatility Contraction Pattern (VCP) Deepvue

Using Deepvue's Screening Tools For Finding VCPs

Deepvue offers specific presets designed to target stocks exhibiting characteristics commonly found in VCPs:

  • Volatility Contraction Pattern (Formerly Power and Tightening): This preset screen looks for stocks that have been in an uptrend with strong relative strength (power) and are now experiencing a tightening in their Relative Measured Volatility (RMV). RMV is a proprietary indicator within Deepvue that helps visualize price and volume consolidation.
  • Tight Range: This preset focuses on stocks currently trading within a narrow price range with minimal price movement. This price stagnation within Deepvue's preset can be a sign of a potential VCP forming.

Volatility Contraction Pattern (VCP) Video

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