An Alternative Investigation of Weak Form Efficiency in Dhaka Stock Exchange Based on Technical Analysis

An Alternative Investigation of Weak Form Efficiency in Dhaka Stock Exchange Based on Technical Analysis

Md. Mahbubul Haque Khan

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Umma Rumana Huq

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University of Dhaka

An Alternative Investigation of Weak Form Efficiency in Dhaka Stock Exchange Based on Technical Analysis

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Abstract

One highly documented method to test a capital market for weak form efficiency is to identify the return predictability of technical trading rules in that market. Studies on these tests are fewer in number in emerging markets than that of in developed markets and most of the tests have drawn conclusion by including only trend indicators in their trading rules. But it has already been recognized in some previous developed markets studies that trend indicators generally fail to identify sufficient information content in the past prices; hence practitioners very often use these trend indicators combined with confirming indicator (Loh 2007). The current study has investigated Dhaka Stock Exchange, an emerging market of South Asia, for weak form market efficiency by approaching the tests of technical trading rules and has confirmed the profitability of these rules up to 2.15 percent costs per transaction. Here it has used stochastic oscillator as a confirming indicator combined with moving averages (trend indicators) which is the first study of its kind in this market, and has found that it can improve the return predictability only for the short length moving averages.

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No external funding was declared for this work.

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The authors declare no conflict of interest.

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How to Cite This Article

Md. Mahbubul Haque Khan. 2015. \u201cAn Alternative Investigation of Weak Form Efficiency in Dhaka Stock Exchange Based on Technical Analysis\u201d. Global Journal of Management and Business Research - C: Finance GJMBR-C Volume 14 (GJMBR Volume 14 Issue C6): .

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GJMBR Volume 14 Issue C6
Pg. 103- 110

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Journal Specifications

Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

Keywords

dhaka stock exchange Market efficiency moving averages combined with stochastic oscillator tests of technical trading rules

Submission ReceivedDecember 8, 2013
Peer Review Double Blind
Handling Editor
Accepted January 4, 2014
Published January 15, 2014

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January 17, 2015

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Article Matrices

Total Score: 102

Country: Bangladesh

Subject: Global Journal of Management and Business Research - C: Finance

Authors: Md. Mahbubul Haque Khan, Umma Rumana Huq (PhD/Dr. count: 0)

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Publish Date: 2015 01, Sat

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