Showing posts with label Darvas Boxes. Show all posts
Showing posts with label Darvas Boxes. Show all posts

Tuesday, February 16, 2010

Darvas Boxes

Richard C. writes and asks about Darvas Boxes.
As usual, I ain't never heard of 'em before.
So I browse a bit and find that it's the brainchild of former ballroom dancer Nicolas Darvas (in 1956 ) and has something to do with stock prices trading in a narrow range ... for a while.
For example:
Microsoft, over the period Nov 18/09 - Dec 16/09):

  • The variation is about 3%.
  • So I draw a rectangle identifying the range.
  • Then I see what happens after that.
See? The price breaks out of the rectangle and (I guess?) one should buy the stock. "I guess", 'cause I don't know much about these Darvas Boxes.

Did I mention that I ain't never heard of 'em before?

P.S. I reckon the stock can break out down as well as up.

There's a spreadsheet to play with. Click!

See if you can find neat Boxes. ... especially recent ones.

Here's a recent one (Walmart):

Let's see what happens next, eh?

The spreadsheet looks like this.

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P.S.