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

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 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 Compute the moving averages, 200MA slope, 52 week range, volume ratio, and relative performance from daily price history in code rather than estimating them — two years of history covers the 200 day MA and its 5 month slope. 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) Pass/Fail [slope data] 4 50MA 150MA and 50MA 200MA Pass/Fail [actual values] 5 Price 50MA Pass/Fail [actual values] 6 Price ≥ 30% above 52 week low Pass/Fail [% above low] 7 Price within 25% of 52 week high Pass/Fail [% from high] 8 Relative Strength 70th percentile (prefer 85 90+) Pass/Fail/Unknown [RS if available] Memory aid: Conditions 1 5 = "MA staircase" (Price 50MA 150MA 200MA, 200MA rising). Conditions 6 7 = "Price position" (far from low, near high). Condition 8 = "Relative strength" (market leader). Step 4: Fundamental Check Strong fundamentals separate real leaders from momentum only stocks. Read references/fundamentals.md for thresholds and rating criteria. Check these in order of importance: 1. Quarterly EPS growth ≥ 20% (prefer 25 50%+). Below 20% = disqualify. 2. EPS acceleration : Current quarter growth prior quarter growth. Deceleration (even with positive growth) is a warning. 3. Annual EPS growth ≥ 25% for each of the past 3 years. 4. Revenue growth ≥ 15% annually, ≥ 20 25% quarterly preferred. If EPS grows but revenue doesn't, the growth is likely from cost cutting (unsustainable). 5. Margin trend : Gross and net margins stable or expanding = healthy. Contracting margins even with EPS growth = red flag. 6. Institutional ownership increasing : Smart money accumulating = fuel for Stage 2 move. 7. Catalyst : New product, FDA approval, major contract, market expansion, etc. Stocks with catalysts can run 50 100%+; without, typically 15 25%. Rate fundamentals: A (EPS 30%, positive, revenue growing) / B (15 30%) / C (0 15%) / D (negative — skip). Step 5: Pattern Recognition Identify which consolidation pattern is forming (if any). Read references/patterns.md for detailed identification rules for each pattern. VCP (Volatility Contraction Pattern) — The Core Pattern The signature SEPA pattern. Look for these 7 characteristics: 1. Stock must be in Stage 2 uptrend (prerequisite) 2. Pullback depths decrease in sequence (e.g., 20% → 12% → 6% → 3%). Minimum 3 contractions, 4 5 ideal. 3. Volume shrinks with each contraction. Final contraction shows "Volume Dry Up" (VDU) — multi week low volume. 4. Higher lows — each pullback bottom is higher than the previous one. 5. Clear pivot point — the consolidation range high = resistance level to break. 6. RS 70 (preferably 85 90+) 7. Market in bull or neutral environment Other Valid Patterns Pattern Depth Duration Key Feature Cup with Handle Cup 12 35%, handle ≤12% 7 65 weeks U shaped base + small handle Flat Base ≤ 15% 5 10 weeks Tight range near prior highs Bull Flag ≤ 50% of flagpole 1 5 weeks Sharp advance + tight drift down High Tight Flag ≤ 25% after 100%+ advance 1 4 weeks Rarest but most powerful All patterns share the same entry rule : breakout above the pivot point with volume ≥ 1.5x the 20 day average. Step 6: Entry Point Analysis Read references/entry rules.md for detailed entry mechanics, true vs false breakout identification, and the pocket pivot alternative. Primary Entry: Pivot Point Breakout Pivot point = the highest price in the consolidation range. This is the supply/demand inflection point. Buy zone = pivot price to +5% above pivot. This is the only valid entry window. Beyond +5% : Do NOT chase. Wait for the next setup. Breakout volume : Must be ≥ 1.5x the 20 day average volume (≥ 2x is strong confirmation). Earnings proximity : Avoid entering within 2 weeks of an earnings report. Breakout Quality Check Signal True Breakout False Breakout Volume ≥ 1.5x average, big spike Below average, weak Close Near the day's high Falls back below pivot Follow through Continues higher next day Drops back into range Context VDU preceded breakout No volume dry up before Risk/Reward Validation Before entering, verify: Stop loss distance : Entry price to stop ≤ 7 8% Reward/risk ratio : Target profit / stop distance ≥ 2:1 (prefer 3:1) If ratio < 2:1, the entry is too risky — skip it. Step 7: Market Environment Check Read references/market environment.md for detailed criteria. The market environment is the master switch for position sizing — it sets the risk per trade used in Step 8: 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 8: Position Sizing & Stop Loss Plan Read references/position sizing.md for the full formula, examples, stop loss evolution, and pyramiding rules. Position Size Formula Example : $100,000 account, 1% risk, buy at $50, stop at $46.50: Max loss = $100,000 × 1% = $1,000 Stop distance = $50 − $46.50 = $3.50 Shares = $1,000 ÷ $3.50 = 285 shares ($14,250 = 14.25% of account) Stop Loss Evolution (3 phases) Phase Trigger Action Phase 1: Initial At entry Hard stop at entry price −7 8%. Non negotiable. Phase 2: Breakeven Stock reaches +8% 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 9: Respond to the User Present a structured analysis report with these sections: Report Structure 1. Stock & Stage : Ticker, current price, identified stage, base count if Stage 2 2. Trend Template Scorecard : 8 condition checklist with pass/fail and actual values 3. Fundamental Grade : A/B/C/D with EPS growth, acceleration status, revenue, margins 4. Pattern Identified : Which pattern (VCP, cup handle, flat base, flag, HTF, or none), with key measurements (contraction depths, volume behavior) 5. 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" 6. Market Environment : Current assessment and the risk per trade it implies 7. 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. 8. 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 references/fundamentals.md — EPS, revenue, margins, institutional holdings, catalysts references/patterns.md — VCP 7 rules, cup with handle, flat base, flag, high tight flag, quality vs fake signals references/entry rules.md — Pivot point mechanics, buy zone, pocket pivot, true vs false breakout identification references/position sizing.md — Formula, stop loss 3 phase evolution, pyramiding, loss handling references/market environment.md — Bull/choppy/bear criteria and position adjustment rules

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