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Is candlestick continuation patterns applicable in Malaysian stock market

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 techn...

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Main Authors: Chin, Chee-Ling, Mohamad, Jais, Sophee Sulong, Balia, Michael, Tinggi
Format: E-Article
Language:English
Published: EDP Sciences 2017
Subjects:
HB Economic Theory
Online Access:http://ir.unimas.my/id/eprint/17201/1/Is%20candlestick%20continuation%20patterns%20applicable%20in%20Malaysian%20Stock%20market%20%28abstract%29.pdf
http://ir.unimas.my/id/eprint/17201/
https://www.shs-conferences.org/
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spelling my.unimas.ir.172012017-08-14T02:05:02Z http://ir.unimas.my/id/eprint/17201/ Is candlestick continuation patterns applicable in Malaysian stock market Chin, Chee-Ling Mohamad, Jais Sophee Sulong, Balia Michael, Tinggi HB Economic Theory 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. EDP Sciences 2017 E-Article PeerReviewed text en http://ir.unimas.my/id/eprint/17201/1/Is%20candlestick%20continuation%20patterns%20applicable%20in%20Malaysian%20Stock%20market%20%28abstract%29.pdf 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 https://www.shs-conferences.org/ DOI: 10.1051/shsconf/20173407009
institution Universiti Malaysia Sarawak
building Centre for Academic Information Services (CAIS)
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Malaysia Sarawak
content_source UNIMAS Institutional Repository
url_provider http://ir.unimas.my/
language English
topic HB Economic Theory
spellingShingle HB Economic Theory
Chin, Chee-Ling
Mohamad, Jais
Sophee Sulong, Balia
Michael, Tinggi
Is candlestick continuation patterns applicable in Malaysian stock market
description 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.
format E-Article
author Chin, Chee-Ling
Mohamad, Jais
Sophee Sulong, Balia
Michael, Tinggi
author_facet Chin, Chee-Ling
Mohamad, Jais
Sophee Sulong, Balia
Michael, Tinggi
author_sort Chin, Chee-Ling
title Is candlestick continuation patterns applicable in Malaysian stock market
title_short Is candlestick continuation patterns applicable in Malaysian stock market
title_full Is candlestick continuation patterns applicable in Malaysian stock market
title_fullStr Is candlestick continuation patterns applicable in Malaysian stock market
title_full_unstemmed Is candlestick continuation patterns applicable in Malaysian stock market
title_sort is candlestick continuation patterns applicable in malaysian stock market
publisher EDP Sciences
publishDate 2017
url http://ir.unimas.my/id/eprint/17201/1/Is%20candlestick%20continuation%20patterns%20applicable%20in%20Malaysian%20Stock%20market%20%28abstract%29.pdf
http://ir.unimas.my/id/eprint/17201/
https://www.shs-conferences.org/
_version_ 1644512560314056704
score 13.211869

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