Is candlestick continuation patterns applicable in Malaysian stock market
Technical analysis is deemed to be an anathema to the modern finance theory as it contradicts with the efficient market hypothesis, typically the weak form market efficiency which forbids the utilization of past prices and trading volume data to predict future market movement. However, the techn...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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EDP Sciences
2017
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| Subjects: | |
| Online Access: | http://ir.unimas.my/id/eprint/17201/ http://ir.unimas.my/id/eprint/17201/1/Is%20candlestick%20continuation%20patterns%20applicable%20in%20Malaysian%20Stock%20market%20%28abstract%29.pdf |
| _version_ | 1848838236182413312 |
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| author | Chin, Chee-Ling Mohamad, Jais Sophee Sulong, Balia Michael, Tinggi |
| author_facet | Chin, Chee-Ling Mohamad, Jais Sophee Sulong, Balia Michael, Tinggi |
| author_sort | Chin, Chee-Ling |
| building | UNIMAS Institutional Repository |
| collection | Online Access |
| description | Technical analysis is deemed to be an anathema to the modern
finance theory as it contradicts with the efficient market hypothesis,
typically the weak form market efficiency which forbids the utilization of
past prices and trading volume data to predict future market movement.
However, the technical indicator of candlestick trading strategy is widely
applied by traders for short term investment. This study thus investigates
on the predictive power of candlestick charting which concentrates on the
application of continuation patterns in Malaysian stock market from 2000
to 2014. Skewness adjusted t-test is employed to test the statistical
significance of candlesticks’ profitability. After taking into account the
transaction costs, sub-sample, and out-of-sample test, the findings show
that only Falling Window pattern after a prevailing downtrend shows
predictive power with bearish signals indicated significantly during the 5-
day holding period. |
| first_indexed | 2025-11-15T06:52:20Z |
| format | Article |
| id | unimas-17201 |
| institution | Universiti Malaysia Sarawak |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T06:52:20Z |
| publishDate | 2017 |
| publisher | EDP Sciences |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | unimas-172012017-08-14T02:05:02Z http://ir.unimas.my/id/eprint/17201/ Is candlestick continuation patterns applicable in Malaysian stock market Chin, Chee-Ling Mohamad, Jais Sophee Sulong, Balia Michael, Tinggi HB Economic Theory Technical analysis is deemed to be an anathema to the modern finance theory as it contradicts with the efficient market hypothesis, typically the weak form market efficiency which forbids the utilization of past prices and trading volume data to predict future market movement. However, the technical indicator of candlestick trading strategy is widely applied by traders for short term investment. This study thus investigates on the predictive power of candlestick charting which concentrates on the application of continuation patterns in Malaysian stock market from 2000 to 2014. Skewness adjusted t-test is employed to test the statistical significance of candlesticks’ profitability. After taking into account the transaction costs, sub-sample, and out-of-sample test, the findings show that only Falling Window pattern after a prevailing downtrend shows predictive power with bearish signals indicated significantly during the 5- day holding period. EDP Sciences 2017 Article PeerReviewed text en http://ir.unimas.my/id/eprint/17201/1/Is%20candlestick%20continuation%20patterns%20applicable%20in%20Malaysian%20Stock%20market%20%28abstract%29.pdf Chin, Chee-Ling and Mohamad, Jais and Sophee Sulong, Balia and Michael, Tinggi (2017) Is candlestick continuation patterns applicable in Malaysian stock market. SHS Web of Conferences, 34. ISSN 2261-2424 https://www.shs-conferences.org/ DOI: 10.1051/shsconf/20173407009 |
| spellingShingle | HB Economic Theory Chin, Chee-Ling Mohamad, Jais Sophee Sulong, Balia Michael, Tinggi Is candlestick continuation patterns applicable in Malaysian stock market |
| title | Is candlestick continuation patterns applicable in Malaysian stock market |
| title_full | Is candlestick continuation patterns applicable in Malaysian stock market |
| title_fullStr | Is candlestick continuation patterns applicable in Malaysian stock market |
| title_full_unstemmed | Is candlestick continuation patterns applicable in Malaysian stock market |
| title_short | Is candlestick continuation patterns applicable in Malaysian stock market |
| title_sort | is candlestick continuation patterns applicable in malaysian stock market |
| topic | HB Economic Theory |
| url | http://ir.unimas.my/id/eprint/17201/ http://ir.unimas.my/id/eprint/17201/ http://ir.unimas.my/id/eprint/17201/ http://ir.unimas.my/id/eprint/17201/1/Is%20candlestick%20continuation%20patterns%20applicable%20in%20Malaysian%20Stock%20market%20%28abstract%29.pdf |