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IS TECHNICAL ANALYSIS PROFITABLE AND CAPABLE FOR STOCK PRICE PREDICTION? EVIDENCE FROM MALAYSIAN STOCK MARKET

UNIMAS Review of Accounting and Finance

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Title IS TECHNICAL ANALYSIS PROFITABLE AND CAPABLE FOR STOCK PRICE PREDICTION? EVIDENCE FROM MALAYSIAN STOCK MARKET
 
Creator MIng, Kelvin Lee Yong
Jais, Mohamad
Karim, Bakri Abdul
 
Description This study aims to test the ability of technical analysis in predicting the stock price and generating profits. This study employed two of the technical analysis indicators, which are (i) Variable Moving Average (VMA) rules and (ii) Elliot Wave Principle incorporated with Fibonacci numbers. Besides that, this study also examines the relationship between the signals emitted by VMA rules and the stock return by applying Ordinary Least Square (OLS) regression analysis. Among the 42 VMA rules tested, there were only 10 VMA rules shown that the mean returns generated from buy signals are significant higher than the unconditional return. While, the mean returns from sell signals are significant lesser than the unconditional return for all the VMA rules tested. As for Elliot Wave Principle incorporated with Fibonacci numbers indicator, the findings shows that impulsive wave is predictable, meanwhile the corrective wave is less predictable. Lastly, only the signals of 14 VMA rules had shown a significant relationship with the daily stock return. In conclusion, the VMA rules only able to generate profits for certain term of moving average, whereas the Elliot Wave Principle incorporated with Fibonacci numbers tools is useful in predicting the stock market trend.
 
Publisher Universiti Malaysia Sarawak
 
Date 2016-08-01
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
 
Format application/pdf
 
Identifier http://publisher.unimas.my/ojs/index.php/URAF/article/view/295
 
Source UNIMAS Review of Accounting and Finance; Vol 1 No 1 (2016): Special Issue Cociaf 2015
 
Language eng
 
Relation http://publisher.unimas.my/ojs/index.php/URAF/article/view/295/pdf5
 
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