Testing the Predicting Ability of Technical Analysis Classical Patterns in the Egyptian Stock Market

El-Ansary, Osama; Mohssen, Dina

doi:10.5430/afr.v6n3p94

Cited by 3 publications

(1 citation statement)

References 18 publications

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“…Price movements that are plotted graphically are thought to convey signals and messages about the crowd's expectations, moods, and attitudes, allowing us to predict their future response and act accordingly. (Mohsen, 2017) Stock market forecasting uses historical data to estimate the future value of a company's stock. The forecasters' main problems are buying/selling the stock at the right time and buying/selling the right stock.…”

Section: Schools and Signals Technical Indicatorsmentioning

confidence: 99%

The Impact of Technical Analysis on Investors’ Financial Decisions in an Emerging Market: Evidence from the Egyptian Stock Market

Magui,

Elsiefy,

Bahaa

2023

AJIBM

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This paper aims to examine the impact of technical indicators on the behaviors of investors in the Egyptian stock market from 2019-2022. Technical indicators are widely used to understand and predict market trends and behaviors. The study evaluates how technical indicators shape the investment decisions of individual investors and institutional investors. The study adopts a research design, using quantitative data analysis approaches. The quantitative part of the research uses descriptive, correlation, and regression statistics to analyze the stock market data retrieved from the Egyptian Stock market database. Meanwhile, the study found that technical indicators have a significant impact on investor behaviors, with institutional investors relying more on technical indicators than individual investors. Moreover, the findings reveal that there are additional factors, such as market sentiment, political climate, and the economic environment, that also impact investment decisions. As such, the paper concludes that technical indicators should only be used as one of many factors in determining investment strategies, in conjunction with broader macroeconomic and market conditions.

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Section: Schools and Signals Technical Indicatorsmentioning

confidence: 99%

The Impact of Technical Analysis on Investors’ Financial Decisions in an Emerging Market: Evidence from the Egyptian Stock Market

Magui,

Elsiefy,

Bahaa

2023

AJIBM

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Relative informative power and stock return predictability: a new perspective from Egypt

Hendawy,

McMillan,

Sakr

et al. 2023

JFRA

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Purpose This paper aims to introduce a new perspective on long-term stock return predictability by focusing on the relative (individual and hybrid) informative power of a wide range of accounting (firm-related), technical and macroeconomic factors while considering the past performance of the stocks using machine learning algorithms. Design/methodology/approach The sample includes a panel data set of 94 non-financial firms listed in Egyptian Exchange 100 index from 2014: Q1 to 2019: Q4. Relativity has been investigated by comparing relevant factors’ individual and combined informative power and differentiating between losers and winners based on historical stock returns. To predict the quarterly stock returns, Gaussian process regression (GPR) has been used. The robustness of the results is examined through the out-of-sample test. This study also uses linear regression (LR) as a benchmark model. Findings The past performance and the presence of other predictors influence the informative power of relevant factors and hence their predictive ability. The out-of-sample results show a trade-off between GPR and LR with proven superiority to GPR in limited experiments. The individual informative power outperforms the hybrid power, in which macroeconomic indicators outperform the remaining sets of indicators for losers, while winners show mixed results in terms of various performance evaluation metrics. Prediction accuracy is generally higher for losers than for winners. Practical implications This study provides interesting insight into the dynamic nature of the predictor variables in terms of stock return predictability. Hence, this study also deepens the understanding of asset pricing in a way that directly contributes to practitioners’ portfolio diversification strategies. Originality/value In concern of the chaos of factors in the literature and its accompanying misleading conclusions, this study takes another look at the approach that studies stock return predictability. To the best of the authors’ knowledge, this is the first study in the Egyptian context that re-examines the predictive power of the previously discovered factors from a different perspective that highlights their relative nature.

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Empirical Evaluations on Momentum Effects of Taiwan Index Futures via Stop-Loss and Stop-Profit Mechanisms

Chung

2019

Int. J. Info. Tech. Dec. Mak.

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The Efficient-Market Hypothesis (EMH) is one of the important theories in financial markets. Under this hypothesis, developing a robust profitable strategy is infeasible because the market price fluctuates immediately following any new information and is thus unpredictable. However, many empirical studies have shown that certain trading strategies in the financial markets are profitable, and the Momentum Strategy is one of the major strategies among them. With four momentum strategies, this paper uses the real-world data points (intra-day data of one-minute time frame) for back-testing the Taiwan Stock Exchange Capitalization Weighted Stock Index Futures (TAIEX Futures) during the period from January 04, 2010 to March 25, 2015. Numerical comparisons among the four strategies reveal that there exist market inefficiencies in Taiwan stock market. We verified the momentum effect of Taiwan Index Futures market through different stop-loss and stop-profit mechanisms. In conclusion, the management of stop-loss and stop-profit is crucial in the profit/loss of the trading strategy. The technique can be applied to many trading methodologies in improving the quality of strategies. Money management provides another path for strategy planning other than purely focusing on the technical mechanisms.

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Testing the Predicting Ability of Technical Analysis Classical Patterns in the Egyptian Stock Market

Cited by 3 publications

References 18 publications

The Impact of Technical Analysis on Investors’ Financial Decisions in an Emerging Market: Evidence from the Egyptian Stock Market

The Impact of Technical Analysis on Investors’ Financial Decisions in an Emerging Market: Evidence from the Egyptian Stock Market

Relative informative power and stock return predictability: a new perspective from Egypt

Empirical Evaluations on Momentum Effects of Taiwan Index Futures via Stop-Loss and Stop-Profit Mechanisms

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