Effectiveness of Candlestick Charting in Malaysian Stock Market
| dc.contributor.author | Chin Chee Ling | |
| dc.date.accessioned | 2026-10-22T02:41:43Z | |
| dc.date.issued | 2017 | |
| dc.description | The issue revolving around efficient market hypothesis and technical analysis has yet to be resolved until now. Technical analysis believes that future market movement can be forecasted by employing past prices and trading volume data which contradicts specifically with the weak form market efficiency whereby securities prices have fully reflected all historical information. The Japanese candlestick charting is considered to be a better trading tool with its ability to show trading signals earlier than other technical indicators which thus form the motivation for the current study instead of other technical analysis technique. Therefore, the purpose of this study is to empirically examine the effectiveness of candlestick charting in Malaysian stock market by using daily data from 3 January 2000 to 31 December 2014 among all public listed companies on Bursa Malaysia. A three-step research design is conducted which includes categorizing pattern, identifying trend prior to occurrence of pattern, and calculating stock return from a buy and hold perspective. The statistical significance of respective candlestick in predicting future stock price movement is examined with skewness adjusted t-test both before and after prevailing trend and with out-of-sample test acting as robustness checking. After transaction cost, it is found that only certain bearish candle lines and bearish reversal patterns are found to be effective in predicting bearish movement of stocks, while some bullish reversal patterns are only capable of generating bullish signals particularly among stocks with attribute of high trading volume. However, none of the continuation pattern shows significant predictive power. The findings also reveal that the effective holding period for candlestick trading strategy in Malaysian stock market generally lies within the 10-day to 15-day holding period. | |
| dc.identifier.uri | https://scholarhub.unimas.my/handle/123456789/3222 | |
| dc.language.iso | English | |
| dc.publisher | UNIVERSITI MALAYSIA SARAWAK | |
| dc.relation.ispartofseries | Faculty of Economics and Business | |
| dc.subject | Efficient market hypothesis, technical analysis, candlestick charting, Malaysia | |
| dc.title | Effectiveness of Candlestick Charting in Malaysian Stock Market | |
| dc.type | Masters |