Minervini's five-condition checklist — trend template, 52-week proximity, base quality, breakout trigger, and defined stop-loss — that defines the highest-probability entry points for momentum positions.
“If you wait for all the uncertainties to be resolved, you'll miss every great opportunity.”
— Mark Minervini
Deeper Explanation
SEPA — Specific Entry Point Analysis — is Mark Minervini's systematic framework for identifying the precise moment to enter a momentum position. It translates the conceptual principles of trend following and breakout investing into five specific, observable conditions that must all be present before a position is initiated. The Trend Template requires the stock to be above its 150-day and 200-day moving averages, with the 150-day above the 200-day, and the 200-day trending upward. This confirms that the stock is in a long-term uptrend and not merely experiencing a short-term bounce within a downtrend. Buying stocks that are below their key moving averages — even after a sharp decline that makes them appear "cheap" — violates the template and dramatically increases the risk of entering a declining trend. Proximity to 52-week high ensures entry is within 25% of the stock's highest price over the past year. This prevents late entries into stocks that have already made large moves and may need extended consolidation before the next advance. Base quality requires the presence of a defined consolidation period — a cup, flat base, or double bottom — with the characteristics of accumulation: declining volume on weak days, tight price action, and support at key moving average levels. The breakout trigger — a move above the base top on volume 40%+ above average — provides real-time confirmation that institutional buying is underway. The stop-loss, placed just below the base structure, is established before entry and executed automatically if hit. Together, these five conditions create the highest-probability entry with the clearest risk parameters in the momentum investor's toolkit.
Continue Learning
Go deeper into the Momentum school — frameworks, case studies, and decision systems.