Analyze stocks using Mark Minervini's SEPA (Specific Entry Point Analysis) methodology. Use this skill whenever the user mentions SEPA, Minervini, superperformance, trend template, VCP (Volatility Contraction Pattern), Stage 2 uptrend, stage analysis, pivot point breakout, or asks about growth stock screening criteria. Also triggers when the user wants to evaluate whether a stock meets swing trading entry criteria, check moving average alignment (bullish stacking: price above 50MA above 150MA above 200MA), assess breakout quality with volume confirmation, calculate position sizing based on risk percentage, or identify consolidation patterns like cup-with-handle, flat base, bull flag, or high tight flag. Use this skill even when the user simply asks "should I buy this stock" or "is this a good setup" in the context of growth/momentum trading, or when they share a stock chart and want pattern analysis.
Analyze stocks using Mark Minervini's SEPA (Specific Entry Point Analysis) methodology. Use this skill whenever the user mentions SEPA, Minervini, superperformance, trend template, VCP (Volatility Contraction Pattern), Stage 2 uptrend, stage analysis, pivot point breakout, or asks about growth stock screening criteria. Also triggers when the user wants to evaluate whether a stock meets swing trading entry criteria, check moving average alignment (bullish stacking: price above 50MA above 150MA above 200MA), assess breakout quality with volume confirmation, calculate position sizing based on risk percentage, or identify consolidation patterns like cup-with-handle, flat base, bull flag, or high tight flag. Use this skill even when the user simply asks "should I buy this stock" or "is this a good setup" in the context of growth/momentum trading, or when they share a stock chart and want pattern analysis.
SEPA Strategy Analysis
Analyze stocks using Mark Minervini's SEPA (Specific Entry Point Analysis) framework — a complete system for identifying high-probability growth stock entries with strict risk management.
Core philosophy: Buy the right stock, in the right stage, at a precise entry point, with strict risk controls. Win rate is ~50-55% — profitability comes from asymmetric risk/reward (small losses, large gains), not from predicting direction.
This skill is for educational/analytical purposes only. It does not constitute investment advice. Never execute trades based solely on this analysis.
Step 1: Gather Stock Data
Collect the following data for the stock. Use yfinance, funda-data, or any available market data tool.
Data needed
Purpose
Current price
Trend template check
50-day, 150-day, 200-day moving averages
MA alignment verification
52-week high and low
Price position check
200MA value from 1 month ago and 4-5 months ago
MA200 slope direction
20-day average volume + today's volume
Volume ratio analysis
Recent quarterly EPS (last 3-4 quarters)
EPS growth & acceleration
Annual EPS (last 3 years)
Long-term growth trend
Recent quarterly revenue (last 3-4 quarters)
Revenue growth check
Gross margin and net margin trend
Margin health
Institutional ownership changes (if available)
Smart money signal
RS rating or 12-month relative performance vs S&P 500
Relative strength
Price history for pattern recognition
VCP / chart pattern analysis
If certain data is unavailable, note it and proceed with what you have. Missing RS rating is a significant gap — flag it.
Step 2: Stage Analysis — Identify the Current Stage
Every stock cycles through four stages. Read references/stage-analysis.md for full details.
Determine which stage the stock is in:
Stage
Characteristics
Action
Stage 1 — Basing
Price near 200MA, MA flat/declining, MAs tangled, low volume
Do nothing, wait
Stage 2 — Advancing
Making higher highs/lows, bullish MA alignment, volume on up days
Only stage to buy
Stage 3 — Topping
Wide swings at highs, frequent false breakouts, heavy volume without progress
Reduce, no new positions
Stage 4 — Declining
Below all MAs, bearish alignment, bounces are selling opportunities
Full cash, stay away
If the stock is NOT in Stage 2, stop here and tell the user. No further analysis needed.
Within Stage 2, count the base number (how many consolidation-then-breakout cycles have occurred):
Base 1-2: Safest, most upside potential — full position
Base 3-4: Still valid but reduce position size
Base 5-6: Late stage — half position at most
Base 7+: Avoid — likely transitioning to Stage 3
Step 3: Trend Template — 8 Mandatory Conditions
All 8 conditions must be met simultaneously. If any fails, the stock does not qualify. Read references/trend-template.md for detailed explanations.
Present results as a checklist:
#
Condition
Status
Value
1
Price > 150MA and Price > 200MA
Pass/Fail
[actual values]
2
150MA > 200MA
Pass/Fail
[actual values]
3
200MA trending up for ≥1 month (ideally 4-5 months)
Sell half, move stop to entry price (breakeven). Trade can no longer lose money.
Phase 3: Trailing
Stock reaches +15%
Sell another 25%, trail remaining stop along 20MA. Close below 20MA = exit all.
Iron rules: Stop losses only move UP, never down. Never average down on a losing position. After 3-4 consecutive losses, reduce risk per trade to 0.5%.
Pyramiding (Adding to Winners)
Only add to winning positions, with decreasing size: 50% initial → 30% at +8% → 20% at next base breakout. Never add to losers.
Step 8: Market Environment Check
Read references/market-environment.md for detailed criteria.
The market environment is the master switch for position sizing:
Environment
Criteria
Risk Per Trade
Max Positions
Bull
S&P 500/Nasdaq above 200MA, breadth expanding, new highs > new lows
1-2%
6-8
Choppy
Sideways indices, frequent failed breakouts
0.5-1%
2-3
Bear
Indices below 200MA, >50% of stocks below 200MA
0% (no new positions)
0 (all cash)
Even the best setups fail in bear markets. Holding cash during bear markets IS a winning strategy — preserving capital for the next bull run.
Step 9: Respond to the User
Present a structured analysis report with these sections:
Report Structure
Stock & Stage: Ticker, current price, identified stage, base count if Stage 2
Trend Template Scorecard: 8-condition checklist with pass/fail and actual values
Fundamental Grade: A/B/C/D with EPS growth, acceleration status, revenue, margins
Pattern Identified: Which pattern (VCP, cup-handle, flat base, flag, HTF, or none), with key measurements (contraction depths, volume behavior)
Entry Assessment:
If a valid pattern exists: pivot price, buy zone, breakout volume requirement
If not yet formed: what to watch for
If already extended: "This has moved beyond the buy zone — wait for the next consolidation"
Position Sizing: Using the formula, show exact shares, stop price, first target, second target, and reward/risk ratio. Ask the user for their account size and risk tolerance if not provided.
Market Environment: Current assessment and how it affects sizing
Overall Verdict: One of:
Strong Buy Setup — all criteria met, actionable now
Watch List — promising but pattern not yet complete or one condition marginal
Pass — fails trend template, wrong stage, or poor fundamentals
Always end with the disclaimer that this is educational analysis, not investment advice.
Reference Files
references/stage-analysis.md — Four-stage theory, transition signals, base counting
references/trend-template.md — Detailed 8-condition explanations and memory aids
