Minervini Trend Template-inspired

What this checklist is trying to capture

Mark Minervini, a US Investing Champion, published his "Trend Template" in Trade Like a Stock Market Wizard (2013). It is a filter, not a buy signal: a way to make sure you only look at stocks that are already in a confirmed long-term uptrend, which he calls Stage 2. The idea is that the biggest winners almost always show this pattern before and during their largest moves, so starting from stocks that don't have it is swimming against the current.

Every test here uses only daily closing prices. Nothing about the company's accounts is involved, so a stock can pass all eight tests and fail every fundamental checklist, or the other way round.

The tests, and exactly how we compute them

Moving averages are simple averages of the last 50, 150 or 200 daily closes. All prices are adjusted for stock splits.

1. Price above the 150-day and 200-day moving averages

The latest close must be above both long-term averages. We show how far above the higher of the two it is.

2. 150-day average above the 200-day average

The medium-term trend is above the long-term trend, so the averages are stacked in the right order.

3. 200-day average rising for at least a month

We compare today's 200-day average with its value 22 trading days ago (about one calendar month). It must be higher. Minervini prefers to see it rising for four to five months; one month is his minimum.

4. 50-day average above both the 150-day and 200-day

The short-term trend is leading, not lagging.

5. Price above the 50-day average

The stock is holding above its short-term trend line.

6. At least 30% above the 52-week low

Measured from the lowest close of the last 252 trading days. A stock that has barely lifted off its low hasn't proven itself.

7. Within 25% of the 52-week high

Measured from the highest close of the last 252 trading days. Leaders tend to trade near their highs, not far below them.

8. Relative strength rank of 70 or higher

Minervini uses Investor's Business Daily's proprietary RS Rating. We can't use that, so we compute our own approximation: a weighted 12-month price return (40% weight on the latest three months, 20% on each of the three quarters before) for every S&P 500 stock, then rank them from 1 to 99. A rank of 70 means the stock outperformed about 70% of the index. Our ranking is against the S&P 500 only, not the whole market as IBD's is, so the numbers aren't directly comparable.

Limitations

• Minervini's own template uses intraday highs and lows; we use closing prices only. On volatile days this can move a borderline result either way.
• Trend tests are backward-looking by design. A stock that passes all eight can still reverse sharply, and the template says nothing about when to sell.
• Results change daily. A stock's score here reflects the close shown on its page.

See how we score for data sources and update timing.