Is candlestick continuation patterns applicable in Malaysian stock market

Chin, Chee-Ling and Mohamad, Jais and Sophee Sulong, Balia and Michael, Tinggi (2017) Is candlestick continuation patterns applicable in Malaysian stock market. SHS Web of Conferences, 34. ISSN 2261-2424

Is candlestick continuation patterns applicable in Malaysian Stock market (abstract).pdf

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Technical analysis is deemed to be an anathema to the modern finance theory as it contradicts with the efficient market hypothesis, typically the weak form market efficiency which forbids the utilization of past prices and trading volume data to predict future market movement. However, the technical indicator of candlestick trading strategy is widely applied by traders for short term investment. This study thus investigates on the predictive power of candlestick charting which concentrates on the application of continuation patterns in Malaysian stock market from 2000 to 2014. Skewness adjusted t-test is employed to test the statistical significance of candlesticks’ profitability. After taking into account the transaction costs, sub-sample, and out-of-sample test, the findings show that only Falling Window pattern after a prevailing downtrend shows predictive power with bearish signals indicated significantly during the 5- day holding period.

Item Type: Article
Uncontrolled Keywords: Technical analysis, finance theory, stock market, unimas, university, universiti, Borneo, Malaysia, Sarawak, Kuching, Samarahan, ipta, education, research, Universiti Malaysia Sarawak
Subjects: H Social Sciences > HB Economic Theory
Divisions: Academic Faculties, Institutes and Centres > Faculty of Economics and Business
Depositing User: Karen Kornalius
Date Deposited: 14 Aug 2017 02:05
Last Modified: 14 Aug 2017 02:05

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