VCP (Volatility Contraction Pattern)
Each pullback shallower than the last — supply drying up bar by bar until a breakout with nothing in its way.
Mark Minervini’s VCP: within a base, the stock pulls back, recovers, pulls back *less*, recovers, pulls back even less. Each contraction means fewer sellers showed up — supply is being absorbed.
The final contraction is tight (Supath requires ≤12%), and the buy signal is the close above the last swing high (the pivot): if sellers were exhausted at every shallower dip, there is nobody left above.
2-4 contractions is typical; each should be noticeably shallower (roughly halving is the classic guide).
Works best in market leaders near 52-week highs, on volume drying through the base.
VCP is the fuzziest pattern here — Supath’s mechanical version (strictly decreasing pivot-to-trough depths) finds candidates; the volume behaviour and trend context still need human judgement.
Analysis only: Supath AI does not give investment advice. Consult a SEBI-registered financial advisor before making investment decisions.