IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v17y2024i12p2942-d1415183.html
   My bibliography  Save this article

Navigating Energy and Financial Markets: A Review of Technical Analysis Used and Further Investigation from Various Perspectives

Author

Listed:
  • Yensen Ni

    (Department of Management Sciences, Tamkang University, New Taipei 251301, Taiwan)

Abstract

This review paper thoroughly examines the role of technical analysis in energy and financial markets with a primary focus on its application, effectiveness, and comparative analysis with fundamental analysis. The discussion encompasses fundamental principles, investment strategies, and emerging trends in technical analysis, underscoring their critical relevance for traders, investors, and analysts operating within these markets. Through the analysis of historical price data, technical analysis serves as a crucial tool for recognizing market trends, determining trade timing, and managing risk effectively. Given the complex nature of energy and financial markets, where many factors influence prices, the significance of technical analysis is particularly pronounced. This review aims to provide practical insights and serve as a roadmap for future research in the realm of technical analysis within energy and financial markets. This review contributes to the ongoing discourse and advancement of knowledge in this crucial field by synthesizing existing perspectives and proposing avenues for further exploration.

Suggested Citation

  • Yensen Ni, 2024. "Navigating Energy and Financial Markets: A Review of Technical Analysis Used and Further Investigation from Various Perspectives," Energies, MDPI, vol. 17(12), pages 1-22, June.
  • Handle: RePEc:gam:jeners:v:17:y:2024:i:12:p:2942-:d:1415183
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/17/12/2942/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/1996-1073/17/12/2942/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Benjamin Blau & Tyler Brough, 2015. "Are put-call ratios a substitute for short sales?," Review of Derivatives Research, Springer, vol. 18(1), pages 51-73, April.
    2. Michael Goldstein & Amy Kwan & Richard Philip, 2023. "High-Frequency Trading Strategies," Management Science, INFORMS, vol. 69(8), pages 4413-4434, August.
    3. Dudjak, Viktorija & Neves, Diana & Alskaif, Tarek & Khadem, Shafi & Pena-Bello, Alejandro & Saggese, Pietro & Bowler, Benjamin & Andoni, Merlinda & Bertolini, Marina & Zhou, Yue & Lormeteau, Blanche &, 2021. "Impact of local energy markets integration in power systems layer: A comprehensive review," Applied Energy, Elsevier, vol. 301(C).
    4. Min-Yuh Day & Yirung Cheng & Paoyu Huang & Yensen Ni, 2023. "The profitability of Bollinger Bands trading bitcoin futures," Applied Economics Letters, Taylor & Francis Journals, vol. 30(11), pages 1437-1443, June.
    5. Lucas W. Davis and Catherine Hausman, 2020. "Are Energy Executives Rewarded for Luck?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 6), pages 157-180.
    6. Luís Almeida & Elisabete Vieira, 2023. "Technical Analysis, Fundamental Analysis, and Ichimoku Dynamics: A Bibliometric Analysis," Risks, MDPI, vol. 11(8), pages 1-24, August.
    7. Li, Yan & Chevallier, Julien & Wei, Yigang & Li, Jing, 2020. "Identifying price bubbles in the US, European and Asian natural gas market: Evidence from a GSADF test approach," Energy Economics, Elsevier, vol. 87(C).
    8. Basher, Syed A. & Sadorsky, Perry, 2006. "Oil price risk and emerging stock markets," Global Finance Journal, Elsevier, vol. 17(2), pages 224-251, December.
    9. Bruno Biais & Christophe Bisière & Matthieu Bouvard & Catherine Casamatta, 2019. "The Blockchain Folk Theorem," The Review of Financial Studies, Society for Financial Studies, vol. 32(5), pages 1662-1715.
    10. Cheol‐Ho Park & Scott H. Irwin, 2007. "What Do We Know About The Profitability Of Technical Analysis?," Journal of Economic Surveys, Wiley Blackwell, vol. 21(4), pages 786-826, September.
    11. Kauffman, Robert J. & Liu, Jun & Ma, Dan, 2015. "Innovations in financial IS and technology ecosystems: High-frequency trading in the equity market," Technological Forecasting and Social Change, Elsevier, vol. 99(C), pages 339-354.
    12. Day, Min-Yuh & Ni, Yensen & Huang, Paoyu, 2019. "Trading as sharp movements in oil prices and technical trading signals emitted with big data concerns," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 525(C), pages 349-372.
    13. Evangelos Vasileiou & Polydoros Tzanakis, 2024. "The Impact of Google Searches, Put-Call Ratio, and Trading Volume on Stock Performance Using Wavelet Coherence Analysis: The AMC Case," Journal of Behavioral Finance, Taylor & Francis Journals, vol. 25(1), pages 111-119, January.
    14. Albers, Stefan, 2023. "The fear of fear in the US stock market: Changing characteristics of the VVIX," Finance Research Letters, Elsevier, vol. 55(PA).
    15. Malcolm Baker & Jeffrey Wurgler, 2007. "Investor Sentiment in the Stock Market," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 129-152, Spring.
    16. James Ming Chen & Mobeen Ur Rehman, 2021. "A Pattern New in Every Moment: The Temporal Clustering of Markets for Crude Oil, Refined Fuels, and Other Commodities," Energies, MDPI, vol. 14(19), pages 1-58, September.
    17. Balvers, Ronald J. & Wu, Yangru, 2006. "Momentum and mean reversion across national equity markets," Journal of Empirical Finance, Elsevier, vol. 13(1), pages 24-48, January.
    18. Morgan, J. & Chu, C.M. & Haines-Doran, T., 2023. "Competent retrofitting policy and inflation resilience: The cheapest energy is that which you don't use," Energy Economics, Elsevier, vol. 121(C).
    19. Allen H. Huang & Haifeng You, 2023. "Artificial intelligence in financial decision-making," Chapters, in: Gilles Hilary & David McLean (ed.), Handbook of Financial Decision Making, chapter 15, pages 315-335, Edward Elgar Publishing.
    20. repec:dau:papers:123456789/14774 is not listed on IDEAS
    21. Kun Li, 2019. "Do Circuit Breakers Impede Trading Behavior? A Study In Chinese Financial Market," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(05), pages 1-18, December.
    22. Burton G. Malkiel, 2003. "The Efficient Market Hypothesis and Its Critics," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 59-82, Winter.
    23. Manela, Asaf & Moreira, Alan, 2017. "News implied volatility and disaster concerns," Journal of Financial Economics, Elsevier, vol. 123(1), pages 137-162.
    24. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    25. Aklin, Michaël & Cheng, Chao-Yo & Urpelainen, Johannes, 2018. "Social acceptance of new energy technology in developing countries: A framing experiment in rural India," Energy Policy, Elsevier, vol. 113(C), pages 466-477.
    26. Kaixiang Cheng & Jian Yao & Rongyue Zheng, 2023. "Energy Performance of Occupant Behaviors on Windows: A Green Building Based Study," Energies, MDPI, vol. 16(5), pages 1-25, February.
    27. Jonathan Brogaard & Terrence Hendershott & Ryan Riordan, 2014. "High-Frequency Trading and Price Discovery," The Review of Financial Studies, Society for Financial Studies, vol. 27(8), pages 2267-2306.
    28. Burton G. Malkiel, 2003. "The Efficient Market Hypothesis and Its Critics," Working Papers 111, Princeton University, Department of Economics, Center for Economic Policy Studies..
    29. Brown, Stephen J. & Warner, Jerold B., 1985. "Using daily stock returns : The case of event studies," Journal of Financial Economics, Elsevier, vol. 14(1), pages 3-31, March.
    30. Fernando Palao & Angel Pardo, 2018. "Do Price Barriers Exist in the European Carbon Market?," Journal of Behavioral Finance, Taylor & Francis Journals, vol. 19(1), pages 111-124, January.
    31. Burton G. Malkiel, 2003. "The Efficient Market Hypothesis and Its Critics," Working Papers 111, Princeton University, Department of Economics, Center for Economic Policy Studies..
    32. De Bondt, Werner F M & Thaler, Richard, 1985. "Does the Stock Market Overreact?," Journal of Finance, American Finance Association, vol. 40(3), pages 793-805, July.
    33. repec:pri:cepsud:91malkiel is not listed on IDEAS
    34. Lukas Menkhoff & Mark P. Taylor, 2007. "The Obstinate Passion of Foreign Exchange Professionals: Technical Analysis," Journal of Economic Literature, American Economic Association, vol. 45(4), pages 936-972, December.
    35. Terrence Hendershott & Charles M. Jones & Albert J. Menkveld, 2011. "Does Algorithmic Trading Improve Liquidity?," Journal of Finance, American Finance Association, vol. 66(1), pages 1-33, February.
    36. Wendy Currie & Jonathan Jm Seddon, 2022. "Exploring technological instantiation of regulatory practices in entangled financial markets," Post-Print hal-03599145, HAL.
    37. Bhattacharya, Mita & Paramati, Sudharshan Reddy & Ozturk, Ilhan & Bhattacharya, Sankar, 2016. "The effect of renewable energy consumption on economic growth: Evidence from top 38 countries," Applied Energy, Elsevier, vol. 162(C), pages 733-741.
    38. Chang, Miguel & Thellufsen, Jakob Zink & Zakeri, Behnam & Pickering, Bryn & Pfenninger, Stefan & Lund, Henrik & Østergaard, Poul Alberg, 2021. "Trends in tools and approaches for modelling the energy transition," Applied Energy, Elsevier, vol. 290(C).
    39. Wang, Bo & Wang, Jianda & Dong, Kangyin & Dong, Xiucheng, 2023. "Is the digital economy conducive to the development of renewable energy in Asia?," Energy Policy, Elsevier, vol. 173(C).
    40. Detollenaere, Benoit & Mazza, Paolo, 2014. "Do Japanese candlesticks help solve the trader’s dilemma?," Journal of Banking & Finance, Elsevier, vol. 48(C), pages 386-395.
    41. Zhu, Qing & Zhou, Xiaobo & Liu, Shan, 2023. "High return and low risk: Shaping composite financial investment decision in the new energy stock market," Energy Economics, Elsevier, vol. 122(C).
    42. Chi-Yen Yin, 2018. "Measuring organizational impacts by integrating competitive intelligence into executive information system," Journal of Intelligent Manufacturing, Springer, vol. 29(3), pages 533-547, March.
    43. Day, Min-Yuh & Ni, Yensen, 2023. "Do clean energy indices outperform using contrarian strategies based on contrarian trading rules?," Energy, Elsevier, vol. 272(C).
    44. Salma Khand & Vivake Anand & Mohammad Nadeem Qureshi, 2020. "The Predictability and Profitability of Simple Moving Averages and Trading Range Breakout Rules in the Pakistan Stock Market," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 23(01), pages 1-38, March.
    45. Manhwa Wu & Paoyu Huang & Yensen Ni, 2017. "Investing strategies as continuous rising (falling) share prices released," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 41(4), pages 763-773, October.
    46. Wadim Strielkowski & Andrey Vlasov & Kirill Selivanov & Konstantin Muraviev & Vadim Shakhnov, 2023. "Prospects and Challenges of the Machine Learning and Data-Driven Methods for the Predictive Analysis of Power Systems: A Review," Energies, MDPI, vol. 16(10), pages 1-31, May.
    47. Ni, Yensen & Liao, Yi-Ching & Huang, Paoyu, 2015. "MA trading rules, herding behaviors, and stock market overreaction," International Review of Economics & Finance, Elsevier, vol. 39(C), pages 253-265.
    48. Yensen Ni & Yi-Ching Liao & Paoyu Huang, 2015. "Momentum in the Chinese Stock Market: Evidence from Stochastic Oscillator Indicators," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 51(S1), pages 99-110, January.
    49. Scarcioffolo, Alexandre R. & Etienne, Xiaoli, 2021. "Testing directional predictability between energy prices: A quantile-based analysis," Resources Policy, Elsevier, vol. 74(C).
    50. Yensen Ni & Min-Yuh Day & Paoyu Huang, 2020. "Trading stocks following sharp movements in the USDX, GBP/USD, and USD/CNY," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 6(1), pages 1-17, December.
    51. Brock, William & Lakonishok, Josef & LeBaron, Blake, 1992. "Simple Technical Trading Rules and the Stochastic Properties of Stock Returns," Journal of Finance, American Finance Association, vol. 47(5), pages 1731-1764, December.
    52. Olga Y. Uritskaya & Vadim M. Uritsky, 2015. "Predictability of price movements in deregulated electricity markets," Papers 1505.08117, arXiv.org.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Paul Handro & Bogdan Dima, 2024. "Analyzing Financial Markets Efficiency: Insights from a Bibliometric and Content Review," Journal of Financial Studies, Institute of Financial Studies, vol. 16(9), pages 119-175, May.
    2. Menkhoff, Lukas, 2010. "The use of technical analysis by fund managers: International evidence," Journal of Banking & Finance, Elsevier, vol. 34(11), pages 2573-2586, November.
    3. Stéphane Goutte & David Guerreiro & Bilel Sanhaji & Sophie Saglio & Julien Chevallier, 2019. "International Financial Markets," Post-Print halshs-02183053, HAL.
    4. Achim BACKHAUS & Aliya ZHAKANOVA ISIKSAL, 2016. "The Impact of Momentum Factors on Multi Asset Portfolio," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 146-169, December.
    5. Shynkevich, Andrei, 2012. "Performance of technical analysis in growth and small cap segments of the US equity market," Journal of Banking & Finance, Elsevier, vol. 36(1), pages 193-208.
    6. Day, Min-Yuh & Ni, Yensen & Huang, Paoyu, 2019. "Trading as sharp movements in oil prices and technical trading signals emitted with big data concerns," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 525(C), pages 349-372.
    7. Chia-Lin Chang & Jukka Ilomäki & Hannu Laurila & Michael McAleer, 2018. "Long Run Returns Predictability and Volatility with Moving Averages," Risks, MDPI, vol. 6(4), pages 1-18, September.
    8. Ghada A. Altarawneh & Ahmad B. Hassanat & Ahmad S. Tarawneh & Ahmad Abadleh & Malek Alrashidi & Mansoor Alghamdi, 2022. "Stock Price Forecasting for Jordan Insurance Companies Amid the COVID-19 Pandemic Utilizing Off-the-Shelf Technical Analysis Methods," Economies, MDPI, vol. 10(2), pages 1-18, February.
    9. Vicentina Gomes, Liliane & Odálio dos Santos, José & Lana Silva, Cristiane & Ferreira de Souza, Maurício, 2018. "Divulgações de informações e o efeito no retorno de ações da maior empresa de educação listada na B3 (Brasil, Bolsa, Balcão) [Information disclosures and the effect on the return of stocks of the l," MPRA Paper 93123, University Library of Munich, Germany, revised 30 May 2018.
    10. Ni, Yensen & Cheng, Yirung & Huang, Paoyu & Day, Min-Yuh, 2018. "Trading strategies in terms of continuous rising (falling) prices or continuous bullish (bearish) candlesticks emitted," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 501(C), pages 188-204.
    11. Bennett, Donyetta & Mekelburg, Erik & Williams, T.H., 2023. "BeFi meets DeFi: A behavioral finance approach to decentralized finance asset pricing," Research in International Business and Finance, Elsevier, vol. 65(C).
    12. Isakov, Dusan & Marti, Didier, 2011. "Technical Analysis with a Long-Term Perspective: Trading Strategies and Market Timing Ability," FSES Working Papers 421, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.
    13. Daniele SCHILIRÒ, 2013. "Bounded Rationality: Psychology, Economics And The Financial Crises," Theoretical and Practical Research in the Economic Fields, ASERS Publishing, vol. 4(1), pages 97-108.
    14. repec:idn:journl:v:1:y:2019:i:sp1:p:1-26 is not listed on IDEAS
    15. Thomas Holtfort, 2019. "From standard to evolutionary finance: a literature survey," Management Review Quarterly, Springer, vol. 69(2), pages 207-232, June.
    16. Maria Elisabete Neves & Mário Abreu Pinto & Carla Manuela de Assunção Fernandes & Elisabete Fátima Simões Vieira, 2021. "Value and growth stock returns: international evidence (JES)," International Journal of Accounting & Information Management, Emerald Group Publishing Limited, vol. 29(5), pages 698-733, October.
    17. Asif, Raheel & Frömmel, Michael, 2022. "Testing Long memory in exchange rates and its implications for the adaptive market hypothesis," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 593(C).
    18. Bernard Njindan Iyke, 2019. "A Test Of The Efficiency Of The Foreign Exchange Market In Indonesia," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 21(12th BMEB), pages 439-464, January.
    19. Farhang Niroomand & Massoud Metghalchi & Massomeh Hajilee, 2020. "Efficient market hypothesis: a ruinous implication for Portugese stock market," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 44(4), pages 749-763, October.
    20. Bell, Peter N, 2013. "New Testing Procedures to Assess Market Efficiency with Trading Rules," MPRA Paper 46701, University Library of Munich, Germany.
    21. Park, Cheol-Ho & Irwin, Scott H., 2004. "The Profitability Of Technical Trading Rules In Us Futures Markets: A Data Snooping Free Test," 2004 Conference, April 19-20, 2004, St. Louis, Missouri 19011, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:17:y:2024:i:12:p:2942-:d:1415183. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.