Price Exhaustion and Number Preference: Time and Price Confluence in Australian Stock Prices
AbstractConfluence occurs when different trading filters generate signals that point to the same directional move. Using regression analysis, this paper investigates confluence trading signals associated with number preference and price exhaustion, for a sample of Australian stocks. The results show that certain price levels tend to act as psychological barriers, and that price exhaustion signals are a real phenomenon in the Australian stock market. It is shown also that confluence exists in the Australian stock market. Importantly, confluence is associated with price retracements that are of economic and statistical significance, offering profitable trading opportunities. The results suggest that Australian stocks do not follow a random walk.
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Bibliographic InfoPaper provided by Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance in its series Economics Series with number 2003_06.
Length: 25 pages
Date of creation: 31 Nov 2003
Date of revision:
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Other versions of this item:
- Chris Doucouliagos, 2005. "Price exhaustion and number preference: time and price confluence in Australian stock prices," The European Journal of Finance, Taylor & Francis Journals, vol. 11(3), pages 207-221.
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