Price Barriers in the Dow Jones Industrial Average

R. Glen Donaldson and Harold Y. Kim

Journal of Financial and Quantitative Analysis, 1993, vol. 28, issue 3, 313-330

Abstract: This study tests the popular claim that the DJIA's movements around key reference points affect “investor sentiment” and thus price behavior. It is found that the DJIA's rise and fall is indeed restrained by “support” and “resistance” levels at multiples of 100 (e.g., 2800, 2900, 3000, etc.) but that, having broken through a 100-level, the DJIA then moves by more than otherwise warranted. A Monte Carlo study and comparisons with other indices confirm the significance of these findings. This suggests that some agents may trade on the basis of the DJIA but does not necessarily suggest that the market is inefficient.

Date: 1993
References: Add references at CitEc
Citations: View citations in EconPapers (53)

Downloads: (external link)
https://www.cambridge.org/core/product/identifier/ ... type/journal_article link to article abstract page (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cup:jfinqa:v:28:y:1993:i:03:p:313-330_00

Access Statistics for this article

More articles in Journal of Financial and Quantitative Analysis from Cambridge University Press Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK.
Bibliographic data for series maintained by Kirk Stebbing ().