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SignalWatch – 5.30.17
May 30th
Darvas Classic is looking for BAC to continue its descent to support.
Darvas Box
Fibonacci Retracement Levels
BAC had a rough day, finishing the day down 1.36%. It recently fell through its 50 SMA, which is a major indicator that bearish momentum is rising. Late last week BAC tested the 50 once again, this time in an attempt to move back above it. Because it failed to break through on that test, we now have even more bearish confirmation. It also formed a lower high after pivoting off of the 50. Volume is also on the rise.
This signal was fired off by the Darvas Box plug-in and the Darvas Classic strategy more precisely. The strategy was developed following Nicolas Darvas’ trading method, known as the Darvas Box. What the plug-in is measuring for is increases and decreases in momentum basically. Darvas uses market momentum to decide when to enter and exit a trade. If a stock’s price breaks out of a Darvas Box, it is a considered a potential entry. And as we can see on BAC, we are looking at a potential continuation of a bearish move. If this move continues, we could see it end up at support right around $22.50.
Darvas Box also likes CLH, this time for a new long position.
Darvas Classic
Clean Harbors rose over half a percent today following last week’s higher low pivot off of the 50 SMA. We can also see that a bullish 50% Fibonacci Retracement has formed. The term “Fibonacci Retracement” comes from the Fibonacci number sequence, including the values 3/8, 4/8, and 5/8. Each of these retracement amounts (38%, 50%, and 62%) is called a Fibonacci Retracement. When you see a Fib. Ret., you look for reversion moves back to its high that generated the pattern. In this case, $61.54. CLH is also oversold on the RSI indicators, which puts it in prime buying territory.
Like the signal above, this signal was fired by the Darvas Classic strategy.
We’re 3/3 tonight with Darvas signals, with another firing on IDCC.
Darvas Classic
Another Darvas signal? Yes, I know, three is a lot, but Darvas fires off great signals. That’s just the way it rolls. As we can see here, we have IDCC which has been trending lower since April and it has just formed the third lower high pivot point. This one right along the 200 SMA, which as we know, is a major technical level that once it is breached, can signal the shift in momentum. And that’s exactly what the Darvas Box looks for! If things continue moving lower, look for IDCC fall down into the $80 where it will once again test support.
You can find the Darvas Box plug-in in our store right here!
Have a great evening and we will see you back tomorrow night.
The products and demonstrations listed on this website are not recommendations to buy or sell, but rather guidelines to interpreting their respective analysis methods. This information should only be used by investors who are aware of the risks inherent in trading. Nirvana Systems shall have no liability for any investment decisions based on the use of their software, any trading strategies or any information provided through other services such as seminars, webinars, or content included in the SignalWatch website.
About the Author Ryan Belknap
Ryan has been with Nirvana since 2012 and has been manning the trading desk since Day 1. He was one of the founding members of Nirvana's Trading Lab and also TraderSource.com along with Ryan Olson and Russell Casperson. Ryan logged more than 3,500 hours trading and educating live in the Lab. He is also the lead author of SignalWatch.com. Ryan is a seasoned educator and has conducted numerous educational webinars and is an OmniTrader University instructor. Ryan prefers swing trading and position trading. Outside of the market, Ryan has passions for the outdoors, baseball, exercise, coffee, pop-culture and spending time with his family.