The profitability of candlestick charting in the Taiwan stock market

Tsung-Hsun Lu

Pacific-Basin Finance Journal, 2014, vol. 26, issue C, 65-78

Abstract: The purpose of this study is to examine the predictive power of candlestick charting by using the daily data for the Taiwan stocks for the period from 4 January 1992 to 31 December 2009. The main contribution of this paper is devising a four-price-level approach to categorize the single-line patterns produced by candlestick charting in a systematic manner. The findings reveal that four patterns are profitable for the Taiwan stock market after transaction costs, and a bootstrap analysis, out-of-sample, and several sub-samples are examined to confirm the robustness of the results.

Keywords: Technical analysis; Candlestick pattern; Behavioral finance; Bootstrap methodology (search for similar items in EconPapers)
JEL-codes: G11 G12 G14 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:26:y:2014:i:c:p:65-78

DOI: 10.1016/j.pacfin.2013.10.006

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