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Volatility scan

VCP Screener: Tight Near the Highs

This scan finds stocks within 5% of their 52-week high whose 20-day historical volatility is below 22%: calm price action just under the highs.

Run this scan in the live demoFree, no sign-up. The demo uses made-up sample data.

The exact rule

Type this in Chalni: historical volatility below 22 and within 5% of 52 week high

  1. HV(20) < 22
  2. Close > 0.95× 52-wk high

Find US stocks where 20-day historical volatility (%) is below 22; and the closing price is above 0.95 times the 52-week high (before today).

Formula view
hist_vol_pct(20) < 22
AND close > 0.95 * highest(high, 252, before_today)
Example chart: Tight near the highs (VCP style)Daily candles of a made-up sample stock with 5% below the 52-week high (before today); Lower panel: Historical volatility % (20 days), dotted line at 22. The shaded day is the day the scan fired.
  • 5% below the 52-week high (before today)
  • Lower panel: Historical volatility % (20 days), dotted line at 22
  • Shaded day: the scan fired
Example from Chalni's made-up sample market, not a real stock. It shows the most recent time this scan fired in the sample US market, picked whether or not the trade worked.

What it means

VCP stands for Volatility Contraction Pattern, a setup made popular by trader Mark Minervini. As a stock forms a base near its highs, each pullback gets smaller and quieter, until the selling dries up and the stock breaks out.

This scan is a simple first filter, not a full VCP detector. It finds stocks that are both near their highs and calm. You still need to check the chart for the shrinking pullbacks.

How traders use it

  • Check the chart for two or more pullbacks that get smaller from left to right.
  • Look for lower volume during the quiet phase and higher volume on the breakout.
  • The pivot, the top of the last tight area, is the usual entry point.

Watch out for

  • Many calm stocks near their highs are just slow movers, not setups.
  • Breakouts in a weak market often fail.

Test it before you trust it

Every scan in Chalni sits an exam. First it runs on older data, the practice: each time it picks a stock, the stock is held for 10 trading days and 0.2% is paid in costs. Then it runs on newer data it has never seen, the exam. A scan that only works in practice has just memorised the past.

See the practice and exam results for this scan in the demo (on sample data; real data comes at launch).

Questions

What is a VCP pattern?

A base where the price swings get smaller each time, showing that selling is drying up. Mark Minervini made it popular.

Can a screener find VCP patterns automatically?

A screener can find good candidates, like this one does, but most traders still confirm the pattern on the chart by eye.

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