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Do Predictive Power of Fibonacci Retracements Help the Investor to Predict Future? A Study of Pakistan Stock Exchange

Rana Zafarullah Shaker, Muzaffar Asad and Nabeeha Zulfiqar
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Rana Zafarullah Shaker: M. Phil Scholar, School of Accounting and Finance, Faculty of Management Studies, University of Central Punjab, Lahore, Pakistan
Muzaffar Asad: Assistant Professor, School of Accounting and Finance, Faculty of Management Studies, University of Central Punjab, Lahore, Pakistan
Nabeeha Zulfiqar: M. Phil Scholar, School of Accounting and Finance, Faculty of Management Studies, University of Central Punjab, Lahore, Pakistan

International Journal of Economics and Financial Research, 2018, vol. 4, issue 6, 159-164

Abstract: There are number of ways like Technical Analysis, Fundamental Analysis and The Efficient Market Hypothesis that helps to know the behaviour of investor which helps to predict future. In this study author used Fibonacci numbers/series analysis which consider for forecasting future stock prices trends. For the purpose of this study four listed companies are selected at random by convenience sampling from Cement Sector for the period of 1st quarter of 2017. Closing prices of open days of market are taken from Karachi Stocks and graphs are made. This study concluded that in four companies of cement sector, there were total 63 support levels out of which 17 (27%) and total 66 resistance level from which 24 (36%) were followed Fibonacci retracements. So the study findings accept the hypothesis that the trend reversals in Cement sector listed in PSX follow Fibonacci retracements to some extent. Analysis of this study showed that there is at least one strong support and one strong resistance in every company and some small resistant and support levels.

Keywords: Fibonacci retracements; Support; Resistance; Technical analysis; Forecasting. (search for similar items in EconPapers)
Date: 2018
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