RE-READ DARVAS ARTICLES

I was flipping through some information and this is a note to myself. Check out the TASC from May, 2005 and June, 2005.

CONSOLIDATING STOCKS:
WNR (Buy target = close above $41.49, Sell target= close below $39.52)
ORCL (Buy target = close above $19.39, sell target = close below $18.39)
MCO looks to be creating a bull pennant. So watch for a breakout in either direction.
FXE which is an ETF based upon the Euro currency. Let's see where this is going to take us.
NLY hasn't made a move for a month and a half. Just keep an eye out.
IFOX seems to be forming a bull flag.

CRM may be on the sell/short list soon.
BLUD: Staying away as the gap that was created in early April looks as if it being filled
MR may also fall back to fill the gap.

Good luck trading.
JD

STOCKS STILL TIGHTENING UP

BLUD, HMIN are still tightening up for a big move. Which way? I don't know. Just be ready when they do.

I am closely watching JASO, TSL, and IFOX to breakout to the upside. Buy if JASO closes above $28.19, TSL above $61.25, and IFOX above $17.14

BIDU officially closed above previous resistance and is now a buy. MR has also broken out of consolidation and is considered a buy as it has broken the ADX above 25.

No position changes in forex.

Good luck trading.
JD

DARVAS WEBSITES

Here are some fun websites to talk about the Darvas theory.

The story: http://www.nicolasdarvas.org/stockmarketarticles.php


How to do it: http://www.darvastrades.com/darvas_boxes.htm

Free Darvas Box plotter: http://www.sethi.org/investments/darvas/

I searched again on Sunday and noticed that BLUD has an ADX of 12. If it closes BELOW $33.65 go short. If it closes ABOVE $34.35 go long. Expectation - ??? No really, I would probably say upward continuation save a huge drop in the stock market.

HMIN has an ADX of 10 and has been for 3 weeks. Big move comin' up? You better believe it.

Good luck trading.
JD

HSR IS A BUY, WIT TESTED ITS LOWER BAR OF DARVAS BOX

HSR hit a buy today as it closed at $11.70. If you are using the Darvas theory along with the ADX model that I worked on, it is now above the level of the old box of $11.60. The other thing that occurred is that there are three white soldiers.

WIT tested the lower end of the Darvas box, but still closed above it meaning that a trader would still be waiting to get in on this one. If you are looking to short this stock, wait until it closes below $16.30.

If you got in on MCO as suggested a few days ago, you were rewarded today with a 4% rise in price on higher trading volume.

BLUD has also retraced in lower trading volume. It might use $31.50 as support/lower end of Darvas box.

No changes in Forex today. There may be some big moves with the Fed talking about interest rates tomorrow.

Good luck trading.

JD

INFY HITS SHORT TRIGGER, BOUGHT GBP/USD

Well, INFY hit the short trigger and closed below the $52.20 mark that I set out in the Darvas technique. So a trader could either short the stock or buy puts. I didn't do it, but I am going to follow the stock.

AF still has a $28.21 trigger, but the 3 days of rising prices has now set the lower bar of the Darvas box at $26.34. So any CLOSE below $26.34 means you would close out your position.

BLUD popped onto the low ADX radar and is a strong candidate. If you wanted to play it the Darvas way, you would have to wait until the $36 top of the box was broken. If you wanted to get in a little earlier, you could buy in at $33.85 as this is a triangle being formed.

HSR has an ADX level of 11 and it is currently touching the top of a Darvas box based upon the low ADX, not a new 52 week high level. $11.70 is a buy point here, but there is a large stop loss clear down to $9.67. Can you handle it?

In fact, if you are using the Darvas theory with a breakout from a low ADX, ICE has just broken out of a consolidation past the buy point of $135.75 and has a stop loss of $121.93. That is just over a 10% stop loss order, FYI.

Bought the GBP/USD pair today at $1.996 for these reasons: (click on the chart to enlarge)

1. ADX is trending down and getting ready to cross back below 25.

2. The slow Stochastic (a non-trending indicator) has bounced of the oversold area and is heading back up and a buy signal denoted by the "B" says to buy.

3. The GBP appears stronger as inflation pressures in the UK are higher than here in the USofA.

Good luck trading.

JD