bob - just got finished "you can still make it in the market" from darvas, 1977. also, "how to trade otcs"...here's what i got from them:
OTCs - much of the information is long out of date. however, it makes me believe that the naz will ALWAYS be volatile, up and down...which is a good thing. why? because 30 years ago, in up and down markets, they were...and had been...and continued to be.
and, some of the former OTCs...AXP, berkshire-hathaway, lilly and more...
the other book; here's the important information:
HOW TO DRAW A DAR-CARD
A) When the price of a rpidly rising stock reaches a resistance point which it does not surpass for 3 or more conescutive days, that point represents the top of the box.
B) If, after falling from the upper limit, the stock reaches a downward resistance point which it does not penetrate for 3 or more consecutive days, that level represents the bottom of the box.
C) The shaded danger level is indicated when the price falls 5% below the bottom of the box.
HOW I USE THE DAR-CARD
A) A stock is in a rising trend when it is in its topmost box. As long as it remains there its price fluctuations should be ignored and the stock is a HOLD.
B) If the price of the stock moves above the top of this topmost box, the stock becomes a BUY. A 10% stop-loss should be set on the first breakout.
C) Having formed a new higher box, if the price falls below the bottom into the shaded area of this box the stock is a SELL.
D) There is no reason to HOLD or BUY a stock that is not in its topmost box.
Also:
1) Darvas buys only stocks making new 52 week highs
2) He now does not buy new breakouts, only the '2nd' breakout to a new high, because too many people have faded the new breakouts. |
