Investigation into the effectiveness of technical analysis indicators

• Main Authors: Tan, Lay Hoon, Sem, Hui Ling, Ho, Louise Huay Suan
• Other Authors: Low Chan Kee
• Format: Final Year Project
• Language: English
• Published: 2015
• Subjects: DRNTU::Business::Finance
• Online Access: http://hdl.handle.net/10356/63542
• Institution: Nanyang Technological University

The objective of this report is to investigate the effectiveness of technical analysis in helping investors to make investment decisions. The motivation is to study if investors, who had limited capital or no expertise in stock trading, can earn quick gain with the help of tools of technical analysis. Our emphasis will show the usefulness of technical indicators such as Advance-Decline Line, On-Balance-Volume and the Moving Average. Seven listed companies from the Stock Exchange of Singapore of various sectors of different industries are selected. The daily All-Shares Index, Straits Times Index and total volume transacted for the market together with the daily high price, low price, closing price, advance and decline indices for each company are tabulated. These data are obtained from the SES Journal and Financial News of the Stock Exchange of Singapore. Analyses of Advance- Decline Line, On-Balance-Volume and Moving Average are done on the companies. The results generally support the evidence that technical analysis is useful. The use of On-Balance-Volume and Advance-Decline Line are able to help investors in detecting the probable trend of the market and act accordingly. Appropriate day-length of Moving Average also helps investors in their investment decisions and capture profit opportunities that arise.