This 'DAR CARD' information is from one of Nicholas Darvas' out-of-print books
in which he said he was still able to pick breakouts in 74/75.
HOW TO DRAW A DAR-CARD
- When the price of a rapidly rising stock reaches a resistance point which it
does not surpass for 3 or more consecutive days, that point represents the top
of the box.
- 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.
- The shaded danger level is indicated when the price falls 5% below the
bottom of the box.
HOW I USE THE DAR-CARD
- 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.
- 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.
- 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.
- There is no reason to HOLD or BUY a stock that is not in its topmost box.
- Darvas buys only stocks making new 52 week highs
- He now does not buy new breakouts, only the '2nd' breakout to a new high.
The successor system of the Darvas method
Under the millstones of the banks
Hoping for the trend and finding chaos
Above average? You will still lose!
The negative-sum game for investors