The idea in one minute
Most big stock-market winners were already in a strong uptrend before their largest gains. Minervini's approach is to look only at stocks whose price trend is already healthy, and then pick the ones with the strongest businesses behind them.
This is the opposite of bargain-hunting. Minervini doesn't buy a stock because it is cheap or because it has fallen; he waits until the market itself is confirming that something is going right. The Trend Template is his checklist for that confirmation.
Where it comes from
Mark Minervini is a US trader who learned from the work of William O'Neil (the creator of CAN SLIM, behind our JOKER card) and built his own method, SEPA. He won the US Investing Championship, trading his own money, in 1997 with a return of 155% and again in 2021 with 334.8%.
He set out the method in Trade Like a Stock Market Wizard (2013) and later books. The Trend Template is the first filter of that method: the stocks that pass are candidates, not yet trades.
The eight rules
All eight must be true. They use the share price and its 50-, 150- and 200-day moving averages, which smooth out day-to-day noise to show the underlying trend.
| Rule | What it means | |
|---|---|---|
| 1 | Price above the 150- and 200-day averages | The long-term trend is up |
| 2 | 150-day average above the 200-day average | The uptrend is established, not a blip |
| 3 | 200-day average rising for at least a month | Minervini prefers four to five months |
| 4 | 50-day average above the 150- and 200-day averages | The recent trend is stronger than the long one |
| 5 | Price above the 50-day average | The stock is acting well right now |
| 6 | Price at least 30% above its 52-week low | It has already proved it can rise |
| 7 | Price within 25% of its 52-week high | It is near its highs, not recovering from a collapse |
| 8 | Relative strength of at least 70 | It has outperformed at least 70% of all stocks; Minervini prefers 80 or more |
What the template doesn't cover
Passing the template makes a stock a candidate. The rest of Minervini's method is where most of the skill lies:
- Strong fundamentals. He looks for fast-growing earnings and sales, often 20 to 25% a year or more, ideally speeding up, with improving margins and a reason behind it such as a new product.
- The setup. A period where the price moves sideways in ever-tighter swings before breaking out on heavy trading. This is chart judgement and can't be screened.
- The exit. Minervini cuts any loss quickly, typically at around 7 to 8% below the purchase price. Without that rule, the method is not the method.
What the evidence shows
Minervini's championship results are real-money competition results. But they come from his whole method, including entries and strict exits, and nobody has published a test of the Trend Template on its own.
What has been tested, many times, are its building blocks:
- Momentum. Stocks that have risen over the past 3 to 12 months have tended to keep outperforming for the following months (Jegadeesh and Titman, 1993, and many studies since, across many countries).
- Near the 52-week high. Stocks close to their yearly high have tended to keep doing better than the rest (George and Hwang, 2004).
The known weakness is sharp reversals. Momentum strategies suffered heavy losses when markets turned suddenly, for example in 2009 and in 2022. That is why the loss-cutting rule matters so much.
Common mistakes
- Buying a stock that passes the template but has already run far above its base. The best entries come after a quiet consolidation, not after a vertical climb.
- Skipping the stop-loss. The method assumes small, quick losses.
- Treating a cheap stock as an opportunity. In this method, weakness is a reason to stay away.
- Ignoring the business. A strong chart with weak earnings is often a short-lived story.
How ValuJack applies it
All eight trend rules. Every JACK company passes the full template, using our data provider's moving averages and relative-strength rank. These rules are the strategy, so we never loosen them.
A rising 200-day average, measured over a month. Minervini's minimum. He prefers four to five months, which our data can't show directly.
Fast-growing earnings. Profit growth of more than 20% over the last year, in line with Minervini's fundamentals.
A profitable business with modest debt. A floor on return on equity, a ceiling on debt, and positive average earnings over five years, so our fair value model has something to work with.
Not far above our fair value estimate. Minervini wouldn't use this. We do, as a guard against paying any price for momentum. It means fewer JACK cards, but each one has a business that supports its price.
The Edge Check. Before a JACK card is dealt, it asks whether real business news is behind the trend, and marks the company down if the price is stretched far above its trend or its home market is falling. Details below.
The entry and the exit are yours. A card can't time a breakout or set your stop. It shows the 7–8% loss rule as information, because it is part of how this strategy is meant to be used.
The same final steps for every card
Whatever the strategy, a company only becomes a card after three more steps. Our own model estimates a fair value from the company's reported earnings, and only companies priced below it (or, for the two momentum and growth cards, not far above it) can be dealt. The Edge Check, described below, then reads the latest reports, filings and news for what the numbers can't show. Finally the company must be tradable at major European online brokers. The full process is on the methodology page, and every card ever dealt stays on the card history.
The Edge Check: what the screen can't see
Every original strategy leaves something to judgement that no screen can measure. The Edge Check is ValuJack's answer: before a card is dealt, an AI research agent reads the company's latest reports, official filings and news, and asks the one question that matters most for this strategy.
The JACK question: Is there real news behind the price trend?
Minervini looks for a business reason behind a strong trend. A price that rises on rumours or hype alone is the kind of move his method avoids.
Counts in favour
- Earnings and sales growth speeding up
- Guidance raised, or a major contract or product with a stated effect on revenue
- The company's industry outperforming the market
Counts against
- A move resting on rumours, takeover talk, a one-off, a short squeeze or sector hype
- Earnings growth slowing in the latest quarter
- The price stretched far above its trend
- The home market in a downtrend
- The industry clearly lagging the market
Checked for every card
- Insider trades: are the company's own managers buying or selling shares with their own money? Awards, option exercises and routine trades are ignored.
- Short sellers: are professional investors betting against the company, and is that bet growing?
- Report wording: has anything changed since last year in the risks, targets, dividend policy, accounting rules or the auditor's report?
- Customers, suppliers and peers: what have they said about demand since the company's own latest report?
- Management's record: have they met their own targets, and have the finance chief or the auditor left unexpectedly?
- The latest report: a clear beat or miss, and has guidance been raised or cut?
What stops a card outright
A profit warning, a takeover bid, a trading suspension, profits not backed by cash, doubt about the company's future or a qualified audit opinion, restated accounts, a large new share issue, a regulator investigating the accounts, or an unanswered fraud allegation from short sellers.
Argue the opposite
Before any verdict, the agent writes down the three strongest reasons this card could fail within the strategy's time frame, and looks for evidence on each. A reason that is confirmed counts against the company, or stops it.
How it changes the cards
Every trading day the best-ranked companies in each tier are checked. A stop removes a company; the other signals move companies up or down the order, and the best-placed company that passes is dealt. A company due to report within the next week usually waits until after its report. Open a card's details to see its Edge Check: the question, a short answer, up to three signals marked ✓ or △, what would break the case, and the date it was checked.
Every point needs a source and a date: the company's own reports, official registers of insider trades and short positions, and exchange news. Forums, social media and analysts' price targets never count, and a source that can't be reached counts as no signal, not as good news. The Edge Check never changes the fair value or the star rating, and never says buy or sell. It is research done by an AI agent under fixed rules, live since 28 October 2026; it can miss things or be wrong.
Questions people ask
What are the eight rules of the Minervini Trend Template?
Price above the 150- and 200-day averages; the 150-day above the 200-day; the 200-day rising for at least a month; the 50-day above both; price above the 50-day; at least 30% above the 52-week low; within 25% of the 52-week high; and a relative strength of at least 70.
Is the Trend Template enough to pick stocks?
No. It finds candidates. Minervini adds strong earnings, a chart setup, a precise entry and a strict loss limit.
Does momentum investing work in Europe?
Momentum is one of the most widely documented patterns in markets, including in Europe, but it can suffer sharp losses when markets turn suddenly.
Sources
- Minervini, M. (2013). Trade Like a Stock Market Wizard. McGraw-Hill.
- Minervini Private Access: SEPA strategy
- Kyodo / PR Newswire: Minervini wins the 2021 US Investing Championship
- ActionAlerts: Using Mark Minervini's Trend Template
- Finer Market Points: Minervini's SEPA methodology explained
- Jegadeesh, N. & Titman, S. (1993). Returns to buying winners and selling losers. Journal of Finance 48.
- George, T. & Hwang, C. (2004). The 52-week high and momentum investing. Journal of Finance 59.
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