Quick answer: Mark Minervini’s Trend Template is a checklist of 8 rules that a stock must pass to be in a confirmed Stage 2 uptrend: price above the 50, 150 and 200-day moving averages in the right order, a rising 200-day average, at least 30% above the 52-week low, within 25% of the 52-week high, and strong relative strength. Stocks that pass are candidates to study, not automatic buys.
Most traders lose money buying stocks that look cheap but are still falling. Mark Minervini, a US Investing Championship winner and author of Trade Like a Stock Market Wizard, built a simple filter to avoid exactly that. His Trend Template only lets a stock onto the watchlist once the market has already shown, through price, that big buyers are behind it.
This guide explains the 8 Trend Template rules, how to apply them to NSE stocks in India, how to build the scan yourself, and the mistakes that trip people up.
What is the Minervini Trend Template?
The Trend Template is a set of technical conditions that describe a stock in a healthy, long-term uptrend, what Stan Weinstein called a Stage 2 advance. Minervini found that nearly all of the biggest winning stocks he studied met these conditions before their largest moves. The template does not tell you when to buy. It tells you which stocks deserve your attention.
The 8 Trend Template rules
| # | Rule | Why it matters |
|---|---|---|
| 1 | Price is above both the 150-day and 200-day moving average | The stock is above its long-term trend |
| 2 | 150-day moving average is above the 200-day moving average | Medium-term trend is stronger than long-term |
| 3 | 200-day moving average has been rising for at least 1 month (ideally 4–5 months) | The long-term trend has turned up, not just bounced |
| 4 | 50-day moving average is above both the 150-day and 200-day | Short-term trend leads the longer trends |
| 5 | Price is above the 50-day moving average | Buyers are still in control right now |
| 6 | Price is at least 30% above its 52-week low | The stock has already proven it can rally |
| 7 | Price is within 25% of its 52-week high (closer is better) | The stock is near its highs, not stuck far below |
| 8 | Relative strength rating of at least 70 (ideally 80–90+) | The stock is outperforming most of the market |
All 8 rules must pass at the same time. A stock that meets 7 out of 8 is not in the template. That strictness is the point: it removes stocks in downtrends, choppy bases and early bounces.
How to apply the Trend Template to Indian stocks
- Use NSE daily charts and simple moving averages of 50, 150 and 200 days.
- Measure relative strength against the Nifty 500 or Nifty 50. A stock that is up 40% while the index is up 10% has strong RS. See our guide to high RS stocks.
- Add a liquidity filter. Many small caps pass the template but trade too little to exit cleanly. A minimum daily traded value (for example ₹5 crore or more) keeps the list practical.
- Check the market first. When the Nifty itself is below its 200-day average, very few stocks pass, and the ones that do fail more often.
How to build a Trend Template scan
- Start with the NSE universe and remove stocks below your liquidity minimum.
- Filter: close above the 50-day, 150-day and 200-day simple moving averages.
- Filter: 50-day above 150-day, and 150-day above 200-day.
- Filter: 200-day moving average higher today than it was 20 trading days ago.
- Filter: close at least 30% above the 52-week low and no more than 25% below the 52-week high.
- Rank the survivors by relative strength and keep the top group.
- Review each chart by hand and look for a proper base, such as a volatility contraction pattern (VCP).
You can run these filters on live NSE data in the Quantsgrow stock screener, then save the list as a weekly watchlist.
Free tool: Position Size Calculator – how many shares to buy for a fixed risk. See all free calculators.
From the template to an actual trade
The Trend Template is step one. Minervini’s process continues with a low-risk entry point:
- Wait for a base: a sideways consolidation where price swings get tighter and volume dries up.
- Buy the breakout: enter as price clears the pivot (the top of the tightest part of the base) on rising volume. Learn to tell real breakouts from traps.
- Set the stop first: a typical maximum loss is 7–8% from entry, and often less from a tight base.
- Size the position so that one stopped-out trade costs a small, fixed share of your capital, such as 1%.
Trend Template stocks vs value stocks
| Trend Template approach | Bottom-fishing / value approach | |
|---|---|---|
| Buys | Strength near 52-week highs | Weakness near 52-week lows |
| Main signal | Price and trend already confirm demand | Valuation looks low |
| Typical risk | Late entry, failed breakouts | Buying a stock that keeps falling |
| Exit rule | Fixed stop-loss, trail with moving averages | Often none until the thesis changes |
Neither approach is “right” for everyone, but if you are a swing or position trader, waiting for the template keeps you out of most long, painful downtrends.
Common mistakes
- Treating every stock that passes as a buy signal, without waiting for a base and a breakout.
- Ignoring rule 3 and buying a stock whose 200-day average is still falling.
- Skipping the market check and trading the template during a broad sell-off.
- Using the template on illiquid stocks with wide spreads and erratic gaps.
- Moving the stop-loss lower when a trade goes against you.
Frequently Asked Questions
What is the Mark Minervini Trend Template?
It is an 8-rule checklist created by Mark Minervini to identify stocks in a confirmed Stage 2 uptrend, based on the 50, 150 and 200-day moving averages, distance from the 52-week high and low, and relative strength.
Does the Minervini Trend Template work in India?
The rules are price-based, so they can be applied to NSE stocks exactly as written. Results depend on market conditions, liquidity and your entry and exit rules, so test the scan on Indian data before trading it.
How many stocks pass the Trend Template?
It changes with the market. In strong markets a few hundred NSE stocks can pass; in weak markets the list can shrink to a handful. A shrinking list is itself a warning sign about market health.
What is the relative strength rating in the Trend Template?
It ranks a stock’s price performance against all other stocks on a scale of 1 to 99. Minervini wants at least 70 and prefers 80 or higher. In India you can approximate it by ranking stocks by their 6 to 12-month return versus the Nifty 500.
Is the Trend Template a buy signal?
No. It is a filter that tells you which stocks are in a healthy uptrend. You still need a low-risk entry, usually a breakout from a tight base, and a pre-set stop-loss.
This article is for education only and is not investment advice or a recommendation to buy or sell any security. Trading involves risk; test any method on paper before using real money.
