As per previous post (Case Study: Darvas Box), I mentioned that the stock is consolidating. To be honest, i didn't know if its consolidating or distributing. So i did some research and as per Rayner, there's no way to tell if the market is on a consolidating or distributing phase. I just made my bet on it and luckily it broke out after 4 days i looked at the chart.
Lets see what happened in between 05.18.2018 to 05.24.2018
Lets see what are the indicators before the break out.
As you can see, RSI is above 50 and its on an uptrend. Last RSI before the breakout was 61 which is nearing the breakout of our darvas box.
Lesson learned: Always monitor the stocks everyday especially if its nearing the breakout. Trade in the intraday if possible and sell on tranches. Possible profit if we have entered @ 9.52 which is 1% higher than our darvas resistance is 20%.
Note: I change the MA to EMA and it was forming AOTS a day before the breakout. Will continue to investigate if EMA is more effective than Simple MA.
Lets see what happens in the next coule of days, if it will pullback or continue its trend.
Basing on the EMA, i think it will continue its rally.
Strategy: Follow the trend and continue selling in tranches :)
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