Friday, September 10, 2010

VOLC is testing the top of a serious range

Quick note on a stock in play: VOLC, Volcano Corp. After a series of higher sub-ranges, a break above 24.70 and it would be ready to test at all-time highs. What I like about this chart is that it has spent a lot of time setting up a solid base, which should give strength to a successful breakout because all the swing-traders would need to cover after shorting the top of the range. These ranges show up on the chart as light-blue Darvas boxes, well, Darvas-inspired boxes at least; I don't think Darvas would consider sub-ranges, but I like to plot all of them because it shows more of the possible support-resistance levels. All of the boxes are based on 3-day highs and 3-day lows as explained by Darryl Guppy in a paper called Darvas Trading - Defining the Trend with Volatility.


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