Trade Like a Stock Market Wizard: How to Achieve Super Performance in Stocks in Any Market: How to Achieve Superperformance in Stocks in Any Market

by Mark Minervini

THE FIVE KEY ELEMENTS OF SEPA The basic characteristics are broken down into five major categories, which make up the key foundational building blocks of the SEPA methodology: 1. Trend. Virtually every superperformance phase in big, winning stocks occurred while the stock price was in a definite price uptrend. In almost every case, the trend was identifiable early in the superperformance advance. 2. Fundamentals. Most superperformance phases are driven by an improvement in earnings, revenue, and margins. This typically materializes before the start of the superperformance phase. In most cases, earnings and sales are on the table and measurable early on. During a stock’s superperformance phase, a material improvement almost always occurs in the fundamental picture with regard to sales, margins, and, ultimately, earnings. 3. Catalyst. Every stock that makes a huge gain has a catalyst behind it. The catalyst may not always be apparent upon a casual glance, but a little detective work on the company’s story could tip you off to a stock with superperformance potential. A new hot-selling product that accounts for a meaningful portion of a company’s sales may provide the spark to ignite a superperformance phase in that company’s stock price. Approval by the FDA, a newly awarded contract, or even a new CEO can bring life to a previously dormant stock. In dealing with small, lesser-known names, it often takes some event to attract attention to a stock. I like to see something that ...