TAILIEUCHUNG - THE PREDICTIVE POWER OF "HEAD-AND-SHOULDERS" PRICE PATTERNS IN THE U.S. SOTCK MARKET

On the one hand, some have interpreted this approach as a relaxation of governance standards on lower tiers or on the market more generally. 21 For instance, Alternext-listed companies are not subject to any of the corporate governance codes applicable in the four jurisdictions covered by the Euronext main market. On the other hand, insofar as these new segments mostly do not compete head-to-head with old exchanges for the same listings the approach can equally be seen as an adaptation of governance requirements to suit the size and type of prospective issuers. Through multiple listing tiers, exchanges may actually. | The Predictive Power of Head-and-Shoulders Price Patterns in the . Stock Market Gene Savinf Paul Weller Janis Zvingelis January 13 2003 Abstract We use the pattern recognition algorithm of Lo et al. 2000 with some modifications to determine whether head-and-shoulders price patterns have predictive power for future stock returns. The modifications include the use of filters based on typical price patterns identified by a technical analyst. With data from the S P 500 and the Russell 2000 over the period 1990-1999 we find strong evidence that the pattern had power to predict excess returns. Risk-adjusted excess returns to a trading strategy conditioned on head-and-shoulders price patterns are 7-9 percent per year. Keywords technical analysis kernel regression stock prices JEL subject numbers G1 G11 G14 f Department of Economics Henry B. Tippie College of Business University of Iowa Iowa City IA 52242 319 335-0855 319 3351956 fax gene-savin@ Department of Finance Henry B. Tippie College of Business University of Iowa Iowa City IA 52242 319 335-1017 319 3353690 fax paul-weller@ Department of Finance Henry B. Tippie College of Business University of Iowa Iowa City IA 52242 319 335-0980 319 3353690 fax janis-zvingelis@ Acknowledgements We are grateful to the editor Bruce Lehmann and a referee for very helpful comments and to Ken French for making available the data on factor risk portfolios. The Predictive Power of Head-and-Shoulders Price Patterns in the . Stock Market Technical analysts use information about historical movements in price and trading volume summarized in the form of charts to forecast future price trends in a wide variety of financial markets. They argue that their approach to trading allows them to profit from changes in the psychology of the market. This view is summarized in the following quotation The technical approach to investment is essentially a reflection of the idea that prices move in trends which are .

• Đầu tư Chứng khoán
• Technological changes
• Infrastructure development
• Inventory of resources
• Endowment opportunities
• Threats to atmospheric resources
• realizing opportunities
• ATMA Agriculture technological
• Management agency
• Changes in knowledge
• Changes in skill and changes
• Adoption of farm
• natural resources
• alternative measures
• substitution possibilities
• resource scarcity
• Important caveats