VCP Screener

VCP Screener

The VCP Screener is Pierce's automated technical hunting tool. It mass-scans thousands of charts to find the exact "Volatility Contraction Patterns" that precede explosive momentum breakouts, doing in seconds what would take a human chartist weeks.

What is a VCP Screener?

Mark Minervini's Volatility Contraction Pattern (VCP) is one of the highest-probability technical setups in trading history. It identifies the exact moment when institutional accumulation has absorbed all retail selling pressure, creating a "coiled spring" just before a stock breaks out.

The problem? Identifying a true VCP requires painstaking visual analysis. You must manually measure the depth of the pullbacks, count the number of contractions, verify the volume dry-up, and ensure the moving averages are perfectly stacked. If you have a watchlist of 500 stocks, finding a perfect VCP setup manually is essentially impossible before the breakout actually happens.

The VCP Screener skill completely automates this visual geometry. It programmatically screens entire market universes, algorithmically checks every single chart against the strict VCP criteria, and hands you a curated list of stocks that are sitting at the exact pivot point, ready to explode.

How Pierce AI Executes It

When you ask Pierce to run a VCP scan, it executes a rigorous, multi-phase technical extraction:

1. The Stage 2 Filter (Trend Template): Pierce ruthlessly eliminates 80% of the market immediately. It ensures the stock has a market cap >$1B (for liquidity) and tests it against Minervini's strict "Stage 2 Uptrend" template. If the stock is below its 200-day moving average, it is instantly discarded.
2. Algorithmic Contraction Detection: For the remaining uptrending stocks, Pierce deploys an ATR-based (Average True Range) algorithm to map the swing highs and lows over the last 6 months. It mathematically verifies if the pullbacks are getting tighter from left to right across the chart (e.g., a 25% drop, then a 12% drop, then a 4% drop).
3. Volume Dry-Up Analysis: A pattern without volume confirmation is a trap. Pierce checks the daily volume during the tightest area of the contraction. It must see volume dry up significantly, proving that selling pressure is exhausted.
4. The 5-Axis Scoring System: Pierce calculates a master composite score out of 100 based heavily on:
   • Trend Quality (25%)
   • Pattern Tightness (25%)
   • Volume Dry-Up (20%)
   • Proximity to Breakout Pivot (15%)
   • Relative Strength vs S&P 500 (15%)
5. Actionable Triage: Pierce doesn't just hand you a random list. It strictly divides the results into two categories: Section A (stocks within 5% of the pivot point, ready to buy today) and Section B (stocks still forming the pattern, to be placed on a watchlist).

Key Metrics & Deliverables

By running the VCP Screener, you receive a hyper-curated list of momentum targets:

• Section A "Entry-Ready" Targets: Stocks that are fully coiled, showing extreme volume dry-up, and sitting within 5% of their breakout pivot price. Ranked in descending order of their Composite Score (minimum score of 70 required).
• Section B "Developing" Targets: Stocks that have the massive prior Stage 2 uptrend but are still forming the final, tight contractions (Composite Score < 70 or distance to pivot > 5%). Ranked in descending order of their Composite Score.
• VCP & Composite Scoring: Candidates are evaluated across 6 core technical factors:
  • VCP Score (0-6 passes): Counts how many criteria are passed (Uptrend, Alignment, High proximity, Low distance, Contraction tightness, and Volume dry-up).
  • Composite Score (0-100 weighted 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 has narrow daily ranges (100% score), moderately tight consolidation (50% score).
    • Volume Dry-Up (20%): Recent volume is well below average or PEG < 2.0 (100% score), else 50%.
• The Pivot Price: Pierce explicitly gives you the exact price level where the breakout mathematically triggers, allowing you to set limit orders and walk away.

Example Prompts & Use Cases

You can actively push Pierce to scan the charts using these exact prompts:

• "Find VCP setups in the S&P 500. Give me the top 5 entry-ready candidates."
• "What stocks are forming volatility contraction patterns right now?"
• "Run a Minervini Stage 2 screen. Are there any tight VCPs forming in the Tech sector?"
• "Show me stocks near a breakout pivot with extreme volume dry-up."
• "Which stocks have the best VCP setups right now? Break them into Section A and Section B."

By explicitly asking to "scan" or "find VCP setups," you trigger the massive, multi-ticker chart analysis.

Methodology Notes & Limitations

The VCP Screener is a sniper rifle, and it requires extreme discipline to use correctly:

• VCPs Fail in Bear Markets: If Pierce reports that almost zero stocks passed the VCP screen, this is a massive macroeconomic warning sign. VCP patterns rely on broad market liquidity to break out. If the S&P 500 is in a downtrend, VCP breakouts will consistently fail.
• Watch Out for "Clunky" Bases: The math might sometimes flag a base as a VCP, but a human eye will see that the chart looks wide, loose, and "clunky." Always use your own eyes to verify the output of the screener. The pattern should look smooth and tight, not chaotic.
• Earnings Roulette: A stock will often form a beautiful, tight VCP right before a major earnings report. Do not buy a breakout if the company is reporting earnings the next day. The binary risk of earnings will completely override any technical setup.

Built for the Breakout Trader

You don't need to overtrade. You only need to catch 3 or 4 massive VCP breakouts a year to generate incredible returns. The problem is finding them before the rest of the market does. The VCP Screener does the heavy lifting, ensuring you are always positioned perfectly at the pivot point, ready to capture the explosive momentum wave.

Note: The VCP Screener requires massive algorithmic chart parsing across entire market datasets, and is available on the Preferred plan and above.