Up 57% from Its Original Breakout, What’s Next for Netflix?

by Darrin Donnelly on December 13, 2010

Click on chart to enlarge.

Click on chart to enlarge.

Netflix (NFLX) has been THE stock to own over the past few months.

NFLX originally broke out of a Double Bottom Base at $124.20 back on August 10th and it has climbed 57% since that breakout.

Technically speaking, NFLX has followed a textbook Darvas pattern during its rise. 

It tends to break out of a Darvas Box and into new highs, pull back to the top of the Darvas Box it just broke out of, build a new box, and then continue its move higher. 

It’s the nearly perfect “Darvas staircase” uptrend. [click to continue…]

Setting Up for Another Big Run

by Darrin Donnelly on December 12, 2010

Here is a hot growth stock showing all the ideal signs of being ready for another big run. 

It’s finding clear support at the 50-day moving average line and it’s consolidating within a tight Darvas Box on decreasing volume.

In short, this stock is showing all the characteristics of a stock that is “resting up” and getting ready for yet another surge higher. [click to continue…]

The 30 Hottest Stocks to Watch

by Darrin Donnelly on December 9, 2010

Here’s a list of the 30 hottest, fastest-moving growth stocks on the market right now. 

As Darvas traders, our goal is to whittle down this list of 30 to the handful of stocks that make up the best of the best.  We only want to be trading those elite market leaders. 

In Darvas Trader PRO, you’ll find the stocks that make that elite list.  But for a broader view of candidates you might want to consider trading, here’s a list of 30 stocks with tremendous Darvas potential. [click to continue…]

Click on chart to enlarge.

Click on chart to enlarge.

On Tuesday, the NASDAQ gave us some not-so-encouraging action. 

While it gapped-up to start the day and actually hit a three-year high, the market sold off as the day went on and all three major indexes closed at their session lows. 

The increased volume that occurred gave us a day of “churning” or “stalling” action, which counts as a distribution day (a day when the market declines on increased volume). 

Distribution days and accumulation days (days when the market goes up on increased volume) can tell us a lot about the strength or weakness of the stock market. 

Currently, distribution days are currently outnumbering accumulation days, which is not a good sign.

But despite this somewhat negative behavior, none of our Darvas stocks have been damaged.  They all continue to maintain key support levels, work on sound new bases, and trend higher. [click to continue…]

Is Apple Too Big for Another Big Run?

by Darrin Donnelly on December 7, 2010

Click on chart to enlarge.

Click on chart to enlarge.

As Darvas System traders, we’re looking for high-growth stocks that have the potential to make big runs in a short period of time. 

Ideally, we want stocks that are likely to double or triple over the next six to 12 months.  This was the standard goal for Nicolas Darvas and it continues to be the goal for his trading students today.

To achieve this goal, Nicolas Darvas focused on stocks that had the following four characteristics:

1) They were members of a hot, high-growth industry. 
2) They had huge earnings growth.
3) They had already shown the ability to move quickly. 
4) They were often mid-sized, younger companies with plenty of room to grow.

There’s little question that AAPL is a current stock market leader that meets the first three criteria.  [click to continue…]

Click on chart to enlarge.

Click on chart to enlarge.

On Friday, the NASDAQ hit new highs for the year, which means it has completely reversed from the downtrend we recently experienced. 

Technically, this puts us back in a Stage 2 Uptrend market. 

I say “technically” because there is good reason to exercise some caution here. 

While the market has shown tremendous resilience and climbed higher even in the face of negative news, this bounce back has occurred on decreasing volume.  Distribution days (market declines on higher volume) are still outnumbering accumulation days (market increases on higher volume). 

Normally, a strong up-trending market will see price increases come on higher volume.  However, just because we’re not seeing such volume action doesn’t mean we can ignore the clearly bullish price action. 

As outlined on the NASDAQ chart that accompanies this article, a clear trend higher is taking place.

This upcoming week should be telling as I see three possible scenarios occurring: [click to continue…]