During the time I was getting in and out of LORILLARD, I was continuously
looking for technical analysis option that would fit my theory.
One very important factor that urged me to deeper search was that
the general market started to get stronger. As I felt this strength
becoming pronounced, I wanted to take full advantage of it by getting
into a promising technical
analysis option as early as possible.
Among the technical analysis option that caught my eye was a little, unknown company called UNIVERSAL PRODUCTS. The technical analysis option was quoted around 35, running up and down between 35 & seven eighths and 33 & a half I found out it was an electronics company and therefore I felt it qualified as far as my techno-fundamentalist theory was concerned.
In July 1958, when I was still in Calcutta, I asked New York for daily quotes for this technical analysis option. The story they told me was very promising. However, my recent LORILLARD losses reminded me that I could be wrong several times in a row and I wanted to act very cautiously. I thought I could get a better feel of the technical analysis option movements if I actually owned some of it, so I decided to make a pilot buy. I sent out the following cable:
"BUY 300 UNIVERSAL PRODUCTS 35 & A QUARTER OR BETTER"
"ENTER STOPLOSS 32 & A HALF"
Now there was nothing to do but sit back, watch and wait for the next move.
At this period, I was flying back and forth across India rather frequently. But cable quotes on UNIVERSAL PRODUCTS followed me everywhere. In the third week of August 1958, I was in Srinagar in Kashmir, when I noticed that the technical analysis option was beginning to firm up. I cabled:
"BUY 1200 UNIVERSAL PRODUCTS 36 & A HALF ON STOP 33 STOPLOSS"
When I returned to the Imperial Hotel in New Delhi I received the notice:
I was quite excited. Although I had already fixed the limit of my possible eventual loss, now it was a question of whether my judgment was right or wrong. I could hardly wait for next day's cable. When it finally arrived, it showed that UNIVERSAL PRODUCTS had closed at 38 & an eighth. Its range for the day was 38 & three quarters to 37 & a half. This meant I was right - at least for the time being.
In the next few days the technical analysis option continued to advance, and when I was in Karachi I bought another 1,500 shares at 40. Shortly thereafter, UNIVERSAL PRODUCTS changed its name to UNIVERSAL CONTROLS and split 2-for-l. It continued to act well but after my last purchase I decided that I had as much UNIVERSAL CONTROLS as I cared to carry.
This was my exact position: (The prices in this table, and all following tables, are average.)
This gave me 6,000 shares of the newly-split technical
analysis option. Now I sat back and held on while the technical
analysis option started to skyrocket.
article is actually only a small snippet of Nicolas
Original Method Of Nicolas Darvas... The Young Dancer
Turned Investor Who, Within 18 Months, Turned $25,000
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