See charts below with an On Balance Volume indicator and the Money Flow Indicator using a 13 period
In my opinion the correction is over. When I wrote that statement I thought "hang on Pete, you don't make predictions". However based on the probability of the price action in the chart above, it appears that price has found support at the long term blue dotted line and volumes are clearly breaking up. Price should now follow. Particularly now that the US markets had a strong close to the trading week.
Over the last 2 weeks the signals for the 52 week highs have slowed, that's understandable considering the recent market price action. The alerts for this week and last week are below. I was busy with school holiday commitments the previous week and I plain forgot about the updates!
The graph below shows the performance of the 52 week high system on the ASX 300 for the last 12 months. Before the recent correction it peaked at 25% return but now its around 16%. In the last year its done 56 trades (around one a week) and has a 42% win rate. Those results do not include dividends but also do not take into account brokerage costs - so it would pretty much even out. The biggest winner was AD8 (chart below) and it was only just stopped out last week. The win rate and return percent p.a., can be improved if trading a stock list with strong fundamentals.
For example, the same 52 week high method used on a list of stocks with high ROE and EPS growth has returned 28% (peaked at 37% before the recent pullback) and has a 60% win rate. It also did less trades with 45 compared to 56.
No rocket science, trade trending stocks with good fundamentals and the bull market does the heavy lifting. You just need to get out of the way.
Have a good week, it should be a good one - unless we get another economic curve ball,
All the best
Peter.