See charts below with an On Balance Volume indicator and the Money Flow Indicator using a 13 period
Inflection point! I have been saying for a few weeks now (reread previous comments) the MFI 13 period was not behaving in a bullish manner, it was pointing down whilst price and OBV were pointing up. Now we have the small correction many were talking about. The price has pulled back to the support of the the previous highs - going back nearly 3 years. There was a huge red volume bar last week, but for every seller is a buyer and some will see this as a buy opportunity, betting that this is a small pullback in a larger move up.
A bullish fact is the OBV sitting on its trend line. As often mentioned here the OBV is a slower indicator, but often more reliable than its faster moving cousin the MFI. I dont predict but I do attempt to gauge the probability of the next move. Price is on long term support and the OBV is on short term support. The MFI has not taken out its previous low. This bodes well for a pause in the price falling more, while the market waits for more news and data. A big one being interest rates and the other the fortunes of China. The Shanghai index has bounced up around 15% in the last 5 weeks. It is still in a solid down trend but early signs of recovery are evident. One would think this will imbue the western markets with more confidence. An interesting space to watch IMO.
Until next week,
Peter
52 week closing highs as of the Fridays close 15/3/2024
Below are the alerts from a scan of the ASX 300 and the 300 to 500
300: COE RDX RED VCX
300-500: EML LGI MAH NXL
Please note: in the eBook I wrote in 2016 (available for purchase on this website on the link below) I have made some changes to the system. If you have bought the eBook I am happy to email you a PDF explaining the changes I made, which from testing and trading does improve the system.
Here is the link to the eBook Mindful Trading using Winning Probability written in 2016 -
and the internationally published The Zen Trader (2022) - now in three languages.
IMPORTANT POINTS TO CONSIDER
A new 52 week high for this system is classified when the stock price is at its highest close (or equal to the highest close) counting back 52 weeks.
If a stock continues to make new highs, for example in the 53rd and 54th week, they are now regarded as ROLLING highs, not NEW 52 week highs.To clarify again, the buy signal for THIS system discussed is a NEW 52nd week or 1 year closing high, not a rolling high as is often given elsewhere.
The signals provided are WITHOUT A BULL FILTER.
The exit used FOR THIS METHOD is the 5/12 EMA crossover. Therefore, some stocks will be re signalling a new high buy signal if they have been recently exited by using the 5/12 exit within the last 12 months. This is important and you need to understand this.
Of course the 5 EMA needs to be above the 12 EMA to make the 52 week high valid, (otherwise we would be selling straight away) nearly always this is the case, but rarely if a stock spikes it is not.
So to repeat, the rules are: USING WEEKLY PARAMETERS!
Entry:
Share price to make a 52 closing (or equal to) week high (when selecting a buy, favour the cheapest stock)
The 5 ema to be above the 12ema
Exit:
if the 5 ema crosses below the 12 ema
The above system contains no position sizing, bull or bear filters or fundamental stock selection, these are discussed and taught to private clients or at my courses.