Predictive Power of Candlestick in Malaysia: Reversal versus Continuation Patterns

Chee, Ling Chin and Mohamad, Jais and Sophee Sulong, Balia (2018) Predictive Power of Candlestick in Malaysia: Reversal versus Continuation Patterns. International Journal of Economics and Business Research, 15 (3). pp. 325-349. ISSN 1756-9850 (In Press)

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Abstract

The practice of technical analysis which utilizes past market information to predict future market movement is typically rejected by weak form market efficiency. Despite that, investors often apply technical indicators to enhance trading profits, especially through the Japanese candlestick charting technique. The current study intends to investigate the effectiveness of candlestick charting in Malaysian stock market by comparing between the reversal and continuation patterns within the sample period of 2000 to 2014. After taking into account the transaction costs, the findings show that reversal patterns are more effective than continuation patterns in portraying accurate trading signals particularly for the bearish reversal patterns. Besides, a 15-day holding period is identified to be appropriate for trading in the Malaysian stock market apart from the 10-day maximum holding period.

Item Type: Article
Uncontrolled Keywords: technical analysis; candlestick charting; reversal patterns; continuation patterns; Malaysia, unimas, university, universiti, Borneo, Malaysia, Sarawak, Kuching, Samarahan, ipta, education, research, Universiti Malaysia Sarawak
Subjects: H Social Sciences > HF Commerce
Divisions: Academic Faculties, Institutes and Centres > Faculty of Economics and Business
Faculties, Institutes, Centres > Faculty of Economics and Business
Depositing User: Saman
Date Deposited: 04 Jan 2018 04:30
Last Modified: 04 Jul 2019 08:38
URI: http://ir.unimas.my/id/eprint/19192

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