In a previous post, What is a Power Trend and How to Spot it on a Chart, I outlined the specifics needed to start a power trend. I also included examples of two power trends, one in 2016 and one in 2018.
In this post I’ll show two more classic power trends. I’ll also include a chart of the current power trend.
Thanks to Mike Webster for pointing out all of these power trends. If you haven’t been reading his weekly market update, I highly recommend you make it part of your weekend routine. Here’s the most recent post: Stock Market Update: The Bull Rages To Higher Ground.
Nicolas Darvas – How I Made $2,000,000 in the Stock Market
The power trend shown above occurred when Nicolas Darvas, author of How I Made $2,000,000 in the Stock Market, was trading stocks.
This power trend began on 5/9/1958 and run through 9/2/1959. That’s an impressive span of one year and three months!
During this run there were only 5 tests of the 50-day moving average, yet no decisive close (> 2%) below the 50-day.
Here’s a quote from Nicolas that fits exactly with the CAN SLIM approach to investing:
One of the Longest Power Trends on Nasdaq
The power trend that follows was from 9/2/1982 through 7/29/1983. This was an impressive 47 week run with the first test of the 50-day occurring on week 45.
Current Power Trend
To put all of this into perspective, the current power trend on the Nasdaq is shown below.