Three Stocks That Passed SEPA and One That Didn't

The SEPA Template: A Framework, Not a Forecast

The Specific Entry Point Analysis (SEPA) methodology, as structurally articulated by Mark Minervini, is absolutely not a predictive tool[cite: 15]. It is a systematic mathematical filter strictly designed to isolate candidates that simultaneously exhibit a precise set of measurable characteristics — variance contraction, relative strength outperformance, earnings acceleration, and aggressive institutional sponsorship[cite: 15].

The output of the template is rigidly binary: either a stock meets the prescribed parameters at the exact moment of inspection, or it mathematically fails the structure[cite: 15]. This analysis critically examines four NSE-listed equities through the SEPA lens: three that flawlessly satisfy the template and one that fatally violates it on a critical sub-surface axis[cite: 15]. The explicit objective is not to evaluate theoretical potential returns, but to definitively demonstrate how the framework eliminates all cognitive ambiguity in candidate selection[cite: 15].

SEPA Parameters: The Non-Negotiable Criteria

Before dissecting individual equities, the SEPA template must be explicitly defined with absolute numerical precision[cite: 15]. The following parameters are ruthlessly applied to the daily chart structure over the preceding 12 months[cite: 15]:

• Trend Condition: Price must securely trade above both the 50-day simple moving average (SMA) and the 200-day SMA, demanding a strict bullish alignment where the 50-day SMA operates above the 200-day SMA[cite: 15]. Additionally, the 150-day SMA must register a visibly rising or flat slope for at least six months[cite: 15].
• Volume Contraction Pattern (VCP): The base must display at least three consecutive mathematical contractions in daily volume relative to the preceding 50-day average, with each independent contraction logging lower than the previous[cite: 15]. The final contraction must absolutely print volume at <30% of the 50-day average[cite: 15].
• Relative Strength (RS): The asset must officially rank within the top 20% of the entire NSE universe based on 12-month trailing price change (demanding an RS rating ≥80)[cite: 15].
• Earnings Acceleration: Quarterly EPS (Earnings Per Share) growth must be strictly positive and mathematically accelerating over the prior three quarters, with the absolute most recent quarter registering at least a 25% year-over-year growth spike[cite: 15].
• Institutional Sponsorship: At least two consecutive quarters of quantifiably increasing FII/DII holdings must be present, absolutely devoid of any sudden divestment exceeding 5% in a single quarter[cite: 15].

These rigid criteria are enforced concurrently[cite: 15]. A failure on any single solitary parameter instantly and permanently disqualifies the candidate from capital deployment consideration[cite: 15].

Three Candidates That Met the Template

The following three equities flawlessly satisfied all SEPA parameters as of the most recent weekly close[cite: 15]. Names are deliberately masked to strictly comply with forward-looking regulatory restrictions; the analytical focus is entirely upon the structural characteristics, not the corporate identity[cite: 15].

Stock A: Price action sustainably remained above both the 50- and 200-day SMAs for an unbroken 14 consecutive months[cite: 15]. The 50-day SMA crossed cleanly above the 200-day SMA in week 22, and the 150-day SMA has exhibited a pristine positive slope continuously since week 10[cite: 15]. The VCP unfolded methodically over a 9-week base: volume violently contracted from 85% of the 50-day average in week 1, down to a mere 22% in week 9[cite: 15]. The Relative Strength rating commanded a 91[cite: 15]. EPS growth rapidly accelerated from 18% (Q-3) to 34% (Q-2) to a massive 52% (most recent quarter)[cite: 15]. Institutional holdings relentlessly rose for three consecutive quarters with absolutely no single-quarter decline exceeding 2%[cite: 15]. All parameters perfectly aligned[cite: 15].

Stock B: Price rested in a beautifully shallow consolidation cleanly above the 50-day SMA, with the 200-day SMA organically rising at a 7% gradient[cite: 15]. The 150-day SMA had been steadily ascending for eight continuous months[cite: 15]. The VCP consisted of five pristine contractions, with the final pivotal contraction volume printing at just 19% of the 50-day average[cite: 15]. RS rating stood at 87[cite: 15]. EPS growth spiked to 45% in the most recent quarter, accelerating up from 30% and 22% in the prior two respective quarters[cite: 15]. Institutional ownership aggressively increased by 8% over two quarters, with absolute zero divestment observed[cite: 15]. The structure flawlessly passed[cite: 15].

Stock C: This specific equity exhibited a remarkably tight Darvas-box-like consolidation immediately following a 65% advance over 12 months[cite: 15]. The 50-day SMA hovered securely above the 200-day SMA, and the 150-day SMA remained flat for four months before deliberately turning up[cite: 15]. The VCP contained four contractions, with the final day's absolute volume drying up to 14% of its 50-day average — a profoundly severe contraction indicating entirely diminished selling pressure[cite: 15]. RS rating operated at 94[cite: 15]. EPS growth skyrocketed to 71%, actively accelerating from 41% and 26%[cite: 15]. Institutional sponsorship surged 12% over two reporting quarters[cite: 15]. All parameters met[cite: 15].

To systematically scan the current live NSE universe for identically pristine setups, run the rigid SEPA filter using the Kasauti screener[cite: 15].

The Candidate That Failed: A Structural Violation

Stock D: At first cosmetic glance, the chart appeared highly constructive — price cleanly within 5% of its 52-week high, 50-day SMA correctly stacked above 200-day SMA, and institutional holdings actively rising for two consecutive quarters[cite: 15]. However, deeper structural inspection quickly revealed a fatal failure on the VCP parameter[cite: 15].

Volume mathematically did not show a clear contraction pattern across the base[cite: 15]. In the alleged "contraction" period, the first three weeks indeed showed declining volume (85% → 62% → 41% of the 50-day average), but the critical fourth week aggressively spiked to 76%, completely shattering the necessary contraction sequence[cite: 15]. Furthermore, the final week's volume printed at 48% of the 50-day average — significantly above the strict 30% threshold limit[cite: 15]. This definitively indicated heavy, unresolved institutional supply[cite: 15].

Additionally, the most recent quarterly EPS growth printed at 12% — a mathematical deceleration from the prior quarter's 18% and severely below the 25% minimum acceleration requirement[cite: 15]. The stock decisively failed two of the five SEPA parameters[cite: 15]. Inclusion based on subjective narrative appeal ("strong brand, growing sector") is strictly prohibited under a systematic framework[cite: 15]. The failure was unambiguous[cite: 15].

Summary: The Binary Language of SEPA

The SEPA framework systematically eliminates all human subjectivity[cite: 15]. Three stocks flawlessly passed; one definitively failed[cite: 15]. The binary outcome generated is never a verdict on theoretical potential performance — it is an immutable statement of structural alignment[cite: 15]. A stock that perfectly passes today may fatally violate tomorrow, and a harsh failure today may functionally realign next quarter[cite: 15]. The methodology guarantees a repeatable process specifically for isolating high-probability setups at a precise point in time[cite: 15].

Parameter Checklist for SEPA Candidates (NSE):

• ☐ Bullish moving average alignment (50 > 200, with both actively rising)[cite: 15].
• ☐ Strict volume contraction sequence with final pivot volume <30% of the 50-day average[cite: 15].
• ☐ Relative strength rating standing ≥80 against the broader index[cite: 15].
• ☐ Mathematically proven EPS acceleration with the most recent quarter logging ≥25% YoY growth[cite: 15].
• ☐ Institutional holdings aggressively increasing for at least two consecutive quarters[cite: 15].
• ☐ For small caps (market cap rank 251+): Sustained ADT ≥ ₹10 crore over the entire base period[cite: 15].

Run these exact parameters programmatically via the Kasauti screener to systematically identify active current candidates[cite: 15].