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Predictive Power of Candlestick in Malaysia: Reversal versus Continuation Patterns

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...

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Main Authors: Chee, Ling Chin, Mohamad, Jais, Sophee Sulong, Balia
Format: E-Article
Published: Universiti Malaysia Sarawak (UNIMAS) 2018
Subjects:
HF Commerce
Online Access:http://ir.unimas.my/id/eprint/19192/
http://www.inderscience.com/info/ingeneral/forthcoming.php?jcode=ijebr
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spelling my.unimas.ir.191922019-07-04T08:38:02Z http://ir.unimas.my/id/eprint/19192/ Predictive Power of Candlestick in Malaysia: Reversal versus Continuation Patterns Chee, Ling Chin Mohamad, Jais Sophee Sulong, Balia HF Commerce 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. Universiti Malaysia Sarawak (UNIMAS) 2018 E-Article NonPeerReviewed 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) http://www.inderscience.com/info/ingeneral/forthcoming.php?jcode=ijebr
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/
topic HF Commerce
spellingShingle HF Commerce
Chee, Ling Chin
Mohamad, Jais
Sophee Sulong, Balia
Predictive Power of Candlestick in Malaysia: Reversal versus Continuation Patterns
description 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.
format E-Article
author Chee, Ling Chin
Mohamad, Jais
Sophee Sulong, Balia
author_facet Chee, Ling Chin
Mohamad, Jais
Sophee Sulong, Balia
author_sort Chee, Ling Chin
title Predictive Power of Candlestick in Malaysia: Reversal versus Continuation Patterns
title_short Predictive Power of Candlestick in Malaysia: Reversal versus Continuation Patterns
title_full Predictive Power of Candlestick in Malaysia: Reversal versus Continuation Patterns
title_fullStr Predictive Power of Candlestick in Malaysia: Reversal versus Continuation Patterns
title_full_unstemmed Predictive Power of Candlestick in Malaysia: Reversal versus Continuation Patterns
title_sort predictive power of candlestick in malaysia: reversal versus continuation patterns
publisher Universiti Malaysia Sarawak (UNIMAS)
publishDate 2018
url http://ir.unimas.my/id/eprint/19192/
http://www.inderscience.com/info/ingeneral/forthcoming.php?jcode=ijebr
_version_ 1644513007361851392
score 13.211869

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