The Investor's Lexicon

The most widely watched long-term trend indicator, separating bull and bear regimes.

The highest price a stock has traded at over the past 52 weeks — the most widely watched resistance level and a key milestone in a stock's momentum trajectory.

William O'Neil

A measure of whether an asset is trending upward relative to its own past price — independent of how it compares to other assets — used as a regime filter in momentum strategies.

William O'Neil

A measure of average daily price range — used to size positions and set stops in proportion to actual volatility.

Adding to a winning position as the stock proves the thesis correct — the opposite of averaging down.

A period of controlled price consolidation — with declining volume and tight price action — that precedes the next major price advance in a leading stock.

William O'Neil

A period of price consolidation — lasting typically 7-65 weeks — where a stock moves sideways or slightly downward after an advance, forming the launch pad for the next move higher.

William O'Neil

The moment when a stock's price moves above a defined resistance level — typically the top of a base pattern — on volume significantly above average, signalling the start of a new price advance.

Mark Minervini

O'Neil's 7-factor stock selection system: Current earnings, Annual earnings, New product or management, Supply and demand, Leader, Institutional sponsorship, Market direction.

William O'Neil

A consolidation pattern resembling a cup followed by a small handle, signalling accumulation before a breakout.

A day when the market falls 0.2%+ on higher volume than the previous session — evidence of institutional selling.

Gary Antonacci's systematic strategy combining absolute momentum (trend-following on an individual asset) with relative momentum (favouring the strongest-performing assets across a universe).

Richard Driehaus

A pattern of successive earnings-per-share improvements where the rate of growth is increasing, not just the level — a key signal of an accelerating business.

William O'Neil

A sequential increase in a company's quarterly earnings growth rate — one of the most powerful indicators that a business has reached an inflection point before its stock makes a major advance.

William O'Neil

The acceleration of earnings growth — companies reporting not just earnings beats but increasing rates of improvement in earnings growth.

Richard Driehaus

A tight sideways price consolidation of 5+ weeks after a prior advance, with less than 15% depth — a sign that sellers have been absorbed.

William O'Neil

O'Neil's specific definition of a market uptrend confirmation: a major index gaining 1.25%+ in higher volume than the prior day, occurring on day 4 or later of a rally attempt from a correction low.

William O'Neil

When the 50-day MA crosses above the 200-day MA — a widely followed bullish trend confirmation signal.

A rare, powerful pattern where a stock doubles in 8 weeks then consolidates tightly — often the most explosive momentum pattern.

The degree to which reputable institutional investors (mutual funds, pension funds, hedge funds) own and are increasing positions in a stock — a measure of sophisticated demand.

William O'Neil

A mathematical formula for optimal bet sizing: the fraction of capital to commit to an investment is (edge ÷ odds), where edge is the probability advantage and odds are the net payoff ratio.

William O'Neil

The proportion of stocks participating in a market advance or decline — a measure of trend health.

A decline of 10–20% from a recent high — a normal feature of bull markets that shakes out weak holders.

The overall trend of the broad stock market — the single most important variable determining whether any stock selection strategy will succeed or fail in a given period.

William O'Neil

The rapid, severe reversal of recent winners that occurs during specific hostile market regimes — the primary tail risk of momentum strategies and the reason regime detection is essential.

William O'Neil

The documented systematic return premium earned by buying recent winners and selling recent losers — one of the most persistent and globally observed factors in asset pricing.

Richard Driehaus

The average price of a security over a specified number of periods — a trend-smoothing tool that separates signal from noise in price action.

Jesse Livermore

An early entry signal where a stock closes up on volume greater than any down-day volume in the prior 10 days.

Allocating capital based on risk per trade, volatility, and conviction — not arbitrary portfolio weights.

A market condition where the major indices are in a strong, accelerating uptrend — ideal for momentum strategies.

The empirically documented tendency for stocks that have outperformed recently to continue outperforming in the near to medium term.

Richard Driehaus

The combined analysis of price movement and trading volume to distinguish genuine institutional buying or selling from noise.

William O'Neil

Investor's Business Daily's 1-99 score ranking a stock's price performance over 12 months relative to all other stocks — O'Neil's proprietary relative strength measure.

William O'Neil

A ranking of a stock's price performance against all other stocks over a defined period — typically 52 weeks — used to identify market leaders before major price advances.

William O'Neil

Current volume as a multiple of average volume — a measure of unusual institutional activity.

The ratio of potential gain to potential loss on a trade — the fundamental filter for entering a position.

Mark Minervini's framework for identifying stocks at the precise moment of breakout from a sound base.

The movement of investment capital from one market sector to another as the economic cycle evolves — following strength into leading sectors and exiting lagging ones.

Richard Driehaus

Stan Weinstein's framework of four market stages a stock passes through: base-building, advancing, topping, and declining — defining when to buy and when to avoid.

Richard Driehaus

A pre-defined price level at which a position is exited automatically to limit loss — the foundational risk management tool that preserves capital for future opportunities.

Mark Minervini

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.

Mark Minervini

A stop-loss that rises with the stock price, locking in profits while allowing the trend to run.

An investment approach that identifies and holds securities in established uptrends — being long when price trends are rising, exiting when trends break.

Richard Driehaus

Defining and confirming an uptrend through higher highs, higher lows, and price above key moving averages.

Minervini's base formation pattern characterised by progressively tighter price contractions with declining volume — the technical signature of professional accumulation before a breakout.

Mark Minervini

Above-average trading volume accompanying a price advance or breakout — confirming that institutional buyers are driving the move rather than low-conviction retail activity.

William O'Neil

Making market decisions based on the preponderance of indicators rather than any single signal.