IDEAS home Printed from https://ideas.repec.org/a/ids/ijecbr/v15y2018i3p325-349.html
   My bibliography  Save this article

Predictive power of candlestick in Malaysia: reversal versus continuation patterns

Author

Listed:
  • Chee-Ling Chin
  • Mohamad Jais
  • Sophee Sulong Balia

Abstract

The practice of technical analysis which utilises 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 ten-day maximum holding period.

Suggested Citation

  • Chee-Ling Chin & Mohamad Jais & Sophee Sulong Balia, 2018. "Predictive power of candlestick in Malaysia: reversal versus continuation patterns," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 15(3), pages 325-349.
    • Handle: RePEc:ids:ijecbr:v:15:y:2018:i:3:p:325-349
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=91051
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    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:ids:ijecbr:v:15:y:2018:i:3:p:325-349. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=310 .

    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.