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Is Abnormally Large Volume a Clue?

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  • Tsung-Hsun Lu
  • Jun-De Lee

Abstract

This paper investigates whether abnormal trading volume provides information about future movements in stock prices. Utilizing data from the Taiwan 50 Index from October 29, 2002 to December 31, 2013, the researchers employ trading volume rather than stock price to test the principles of resistance and support level employed by technical analysis. The empirical results suggest that abnormal trading volume provides profitable information for investors in the Taiwan stock market. An out-of-sample test and a sensitive analysis are conducted for the robustness of the results.

Suggested Citation

  • Tsung-Hsun Lu & Jun-De Lee, 2016. "Is Abnormally Large Volume a Clue?," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 8(9), pages 226-233, September.
    • Handle: RePEc:ibn:ijefaa:v:8:y:2016:i:9:p:226-233
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    trading volume; technical analysis; out-of-sample; Taiwan stock market;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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