VCP Screener

VCP Screener

The VCP Screener automates technical chart analysis across stock universes to identify Volatility Contraction Patterns (VCP), filtering for candidates nearing breakout pivot levels.

What is a VCP Screener?

Mark Minervini's Volatility Contraction Pattern (VCP) evaluates price consolidation geometry, identifying periods where price swings narrow and volume contracts prior to potential momentum breakouts.

Manually scanning hundreds of stock charts for valid VCP setups requires calculating pullback depths, counting contraction sequences, verifying volume dry-up, and checking moving average alignments across large watchlists.

The VCP Screener skill automates this visual and quantitative workflow. It screens market universes, algorithmically evaluates daily chart geometry against VCP criteria, and categorizes candidates by proximity to key pivot breakout levels.

How Pierce AI Executes It

When you request a VCP screen, Pierce AI executes a multi-phase technical analysis:

1. Uptrend Filter (Stage 2 Template): Pierce filters out stocks lacking a clear prior uptrend. It checks for liquid market cap (>$1B) and verifies whether the stock is trading above key moving averages (e.g. 200-day SMA).
2. Contraction Sequence Geometry: For qualifying uptrending stocks, Pierce measures swing highs and lows to verify if price pullbacks are narrowing from left to right (e.g., a 22% pullback followed by 12% and 4% pullbacks).
3. Volume Dry-Up Analysis: Pierce inspects trading volume during the tightest portion of the base, checking whether volume decreases to signal reduced selling supply.
4. 5-Axis Technical Scoring: Pierce calculates a composite score (0–100) based on:
   • Trend Quality (25%)
   • Pattern Tightness (25%)
   • Volume Dry-Up (20%)
   • Proximity to Breakout Pivot (15%)
   • Relative Strength vs. S&P 500 (15%)
5. Categorized Output: Results are categorized into: Section A (candidates within 5% of pivot breakout level) and Section B (candidates forming earlier stages of consolidation).

Key Metrics & Deliverables

By running the VCP Screener, you receive a structured technical breakdown:

• Section A "Entry-Ready" Candidates: Tickers positioned within 5% of their breakout pivot price with volume contraction. Ranked in descending order of Composite Score (minimum score of 70).
• Section B "Developing" Candidates: Stocks exhibiting strong prior uptrends that remain in earlier consolidation stages. Ranked in descending order of Composite Score.
• VCP & Composite Scoring: Candidates are evaluated across 6 core technical factors:
  • VCP Score (0–6 passes): Number of passed technical criteria (Uptrend, Alignment, High proximity, Low distance, Contraction tightness, Volume dry-up).
  • Composite Score (0–100 index):
    • Uptrend Strength (30%): Price > SMA50 and SMA50 > SMA200 (100% score), price > SMA200 but below SMA50 (60% score).
    • Proximity to 52w High (20%): Price >= 90% of high (100% score), 80–90% of high (60% score).
    • Contraction Tightness (30%): Price within 5% of SMA50 or narrow daily ranges (100% score), moderate consolidation (50% score).
    • Volume Dry-Up (20%): Recent volume below average (100% score), else 50%.
• Pivot Price Threshold: Reports the technical resistance price identified as the breakout level.

Example Prompts & Use Cases

You can instruct Pierce to run VCP screens using prompts such as:

• "Find VCP setups in the S&P 500. Show me the top entry-ready candidates."
• "What stocks are forming volatility contraction patterns right now?"
• "Run a Minervini Stage 2 screen for tight VCPs in the Tech sector."
• "Show me stocks near a breakout pivot with volume dry-up."
• "Which stocks have the highest VCP scores right now? Categorize into Section A and Section B."

Methodology Notes & Limitations

Keep these practical technical considerations in mind:

• Broad Market Regime: Technical patterns experience higher failure rates when broad equity indices (S&P 500 / Nasdaq) are in sustained downtrends.
• Visual Chart Context: Quantitative screeners analyze price math, but manual visual review is always recommended to check base symmetry and chart clarity.
• Earnings Volatility: Avoid trading breakouts immediately ahead of major earnings releases due to binary event risk.

Systematic Technical Screening

The VCP Screener provides a fast, structured tool for identifying and ranking volatility contraction setups across market universes, helping traders focus their technical analysis efficiently.

Note: The VCP Screener requires processing across large market data sets, and is available on the Preferred plan and above.