Tuesday, February 25, 2003 9:51:27 AM
Another chart look at PAYX
If using only the box part of the Darvas method you could be Long PAYX here until the stock broke below the $25 level. The top of the current box would be at $26 resistance and the bottom at the $25 support. If PAYX dropped below the $25 support level you could go Short on the stock and use $25 as the top of your new box with the bottom of the box to be determined by where the stock next finds support. For now the $25 support level is holding. Can you see how the SMAs show the Support at the $25 level also? That is why I like to trigger Long or Short based on where a stock or index is trading in relationship to the SMAs. The SMAs will indicate whether the primary stock trend is finding Resistance or Support. If a Darvas box was drawn for PAYX in the middle of Dec when the resistance was 29 and the support was 28 then you can see how the move below the box, also shown by the SMA support, could have triggered a short. Let's see how it will work out here as PAYX has just hit $25. Time to see if it will stay in the box or Breakdown :^)
If using only the box part of the Darvas method you could be Long PAYX here until the stock broke below the $25 level. The top of the current box would be at $26 resistance and the bottom at the $25 support. If PAYX dropped below the $25 support level you could go Short on the stock and use $25 as the top of your new box with the bottom of the box to be determined by where the stock next finds support. For now the $25 support level is holding. Can you see how the SMAs show the Support at the $25 level also? That is why I like to trigger Long or Short based on where a stock or index is trading in relationship to the SMAs. The SMAs will indicate whether the primary stock trend is finding Resistance or Support. If a Darvas box was drawn for PAYX in the middle of Dec when the resistance was 29 and the support was 28 then you can see how the move below the box, also shown by the SMA support, could have triggered a short. Let's see how it will work out here as PAYX has just hit $25. Time to see if it will stay in the box or Breakdown :^)
Good Luck to All! :^)
PLAN the TRADE and TRADE the PLAN!
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