The Boxing VCP Setup: Gary Glover's New Momentum Trading Pattern for ASX Stocks
- Anita Arnold
- Sep 19
- 6 min read
When Momentum Trading Meets Muhammad Ali's Strategy
"It reminds me of Muhammad Ali versus George Foreman," explained Gary Glover as he outlined a powerful variation of the Volatility Contraction Pattern (VCP) that's proving particularly effective in current ASX conditions. "Come out swinging the first couple of rounds, then go into defence mode—the rope-a-dope—take all the punishment whilst the market contracts, then come out swinging again."
This boxing analogy has become Gary's way of identifying a specific type of VCP setup that's showing remarkable consistency amongst ASX momentum leaders. The pattern captures something traditional VCP analysis often misses: the psychological rhythm of how institutional money moves in and out of positions.
Watch Gary demonstrate this boxing VCP concept using live ASX examples to illustrate the educational principles discussed in this analysis.
Understanding the Traditional VCP vs the Boxing Setup
The classic VCP pattern, created by momentum market legend Mark Minervini, involves a stock making a significant fundamental advance, and contracting in volatility whilst holding most of its gains before breaking out again. Gary's boxing variation adds crucial psychological context to this technical framework.
Traditional VCP Focus:
Percentage pullback measurements
Volume contraction analysis
Time duration of the pattern
Boxing VCP Enhancement:
Psychological phases of institutional behaviour
Moving average interaction during contraction
Power-pause-power rhythm recognition
The boxing metaphor helps traders understand that during the "rope-a-dope" phase, the stock isn't showing weakness—it's conserving energy for the next powerful move whilst sitting on crucial support levels.
The Three-Phase Boxing Pattern
Gary's analysis reveals a consistent three-phase structure in the strongest momentum setups:
Phase 1: Come Out Swinging
The initial explosive move demonstrates institutional accumulation and genuine momentum. Key characteristics include:
Significant volume expansion
Breakout from previous consolidation
Strong relative performance versus market indices
Often involves breaking through 52-week highs or significant resistance levels
Phase 2: The Rope-a-Dope
During this crucial phase, the stock appears to be "taking punishment" but actually demonstrates remarkable resilience:
Volume dries up substantially
Price action tightens around key moving averages (10, 20, or 50-day) "on the ropes"
Holds the majority of the initial explosive gain
May show brief undercuts that quickly recover
Phase 3: The Knockout Punch
The second explosive move often proves even more powerful than the first:
Volume returns with conviction
Breaks through the high of the consolidation
Often leads to extended runs of 100%+ gains
Frequently coincides with sector-wide momentum
Educational Examples from Current Market Leaders
Gary highlighted several ASX stocks demonstrating this boxing pattern, emphasising how the educational framework applies across different sectors and market capitalisations.
The uranium sector provided particularly clear examples, with stocks showing the classic "jab-jab-knockout" sequence. Energy names displayed the power-pause-power rhythm, whilst small-cap momentum leaders demonstrated how the pattern scales across market segments.
Remember that past performance is no guarantee of future results, and all trading involves risk. The focus remains on understanding the underlying psychological principles rather than predicting specific outcomes.
Risk Management in Boxing VCP Setups
One of the most valuable aspects of Gary's boxing approach lies in its risk management clarity. The moving average "ropes" provide logical stop-loss levels during the rope-a-dope phase.
Position Sizing Principles:
Tighter stops allow for larger position sizes
Wider stops require smaller positions to maintain consistent risk
The 5% risk rule applies regardless of setup type
Stop-Loss Placement:
Use the moving average being defended (10, 20, or 50-day)
Allow minimal breathing room (1-2 cents below for smaller stocks)
Adjust position size based on stop distance
Entry Timing:
Wait for breakout above the consolidation high
Use limit orders to avoid chasing momentum
Scale in if the setup develops over multiple days
Current Market Context and Small-Cap Leadership
Gary's return from leave coincided with interesting market dynamics. The data shows the strongest momentum profile in 12 months, driven largely by small and micro-cap stocks. This creates both opportunities and risks.
Market Characteristics:
Elevated momentum in top 30 companies
High representation of small-cap names
Lower percentage of stocks above 50-day moving averages (suggesting overall market weakening)
Continued sector rotation through energy themes
"We're seeing less stocks above the 50-day moving average, but from a momentum perspective, we're seeing some pretty elevated stocks," Gary observed. This apparent contradiction highlights why momentum trading requires looking beyond broad market measures.
The small-cap leadership pattern historically appears late in momentum cycles, warranting cautious position sizing despite the explosive profit potential these stocks offer.
The Psychology Behind Pack Movement
Gary's analysis connects to the fundamental "stocks move in packs" philosophy that underlies Finer Market Points' approach. The boxing VCP pattern becomes most powerful when multiple stocks in related sectors show similar setups simultaneously.
This sector-based approach significantly improves the probability of successful outcomes. Research indicates that stocks breaking out when their sector peers show similar strength have more than double the success rate of isolated breakouts.
Sector Rotation Themes:
Energy complex showing continued strength
Uranium, lithium, and coal rotating through leadership
Small-cap precious metals gaining momentum
Technology adoption in resources emerging
Advanced Pattern Recognition Techniques
The boxing analogy serves a practical purpose beyond memorable metaphors. It helps traders recognise the emotional phases that both stocks and traders experience during these patterns.
Psychological Phases:
Excitement during initial breakout
Doubt and impatience during consolidation
Recognition and FOMO during second breakout
Understanding these psychological stages helps maintain discipline during the crucial rope-a-dope phase when novice traders often exit positions prematurely.
Integration with Moving Average Analysis
Gary's boxing framework integrates seamlessly with systematic moving average analysis. The "ropes" concept gives traders clear reference points for both entry and exit decisions.
Moving Average Hierarchy:
10-day MA: Short-term momentum gauge
20-day MA: Intermediate trend support
50-day MA: Longer-term strength indicator
The strongest boxing setups often show compression between these moving averages during the rope-a-dope phase, creating what Christopher Hall refers to as "compression" formations, often coupled with "coils" too.
Sector Analysis and Thematic Integration
The boxing VCP pattern proves most reliable when supported by broader thematic trends. Gary's analysis of energy sector rotation demonstrates how individual stock patterns connect to larger market movements.
FMP members currently tracking multiple energy subsectors observe these boxing patterns developing simultaneously across related companies, providing additional confirmation for trade selection and timing.
The systematic monitoring of entire sectors reveals pattern clusters that individual stock analysis might miss, demonstrating why comprehensive market coverage enhances pattern recognition success rates.
Continue Building Pattern Recognition Skills
The boxing VCP concept represents an evolution in momentum trading education, combining technical analysis with intuitive psychological frameworks. As Gary noted, this pattern requires practice to identify consistently in real market conditions.
FMP YouTube members access comprehensive momentum trading education through weekly 3030 Lists featuring detailed Launch Pad opportunity analysis, community discussions with experienced momentum traders, and the complete video library covering systematic pattern recognition techniques.
Key Takeaways
Gary Glover's boxing VCP framework provides a memorable and effective way to identify high-probability momentum setups on the ASX. The power-pause-power rhythm offers both entry signals and risk management guidance.
Current market conditions favour this approach, with small-cap leadership creating numerous boxing VCP opportunities across energy and resource sectors. Remember that past performance is no guarantee of future results, and systematic risk management remains crucial regardless of pattern quality.
The integration of moving average analysis with psychological awareness helps traders maintain discipline during the challenging rope-a-dope phases that separate successful momentum traders from those who exit prematurely.
For Australian momentum traders, understanding sector rotation patterns and pack movement dynamics significantly enhances the probability of successful boxing VCP trades.
Continue developing pattern recognition skills by exploring related educational content on momentum psychology and systematic sector analysis approaches.
Disclaimer: This content is for educational purposes only and does not constitute financial advice. Past performance is no guarantee of future results. Consider financial situation and seek professional advice before making investment decisions.
Finer Market Points Pty Ltd, CAR 1304002, AFSL 526688, ABN 87 645 284 680. This general information is educational only and not financial advice, recommendation, forecast or solicitation. Consider objectives, financial situation and needs before acting. Seek appropriate professional advice. We accept no liability for any loss or damages arising from use.
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