The Use of Technical and Fundamental Analysis in the Stock Market in Emerging and Developed Economies

by Naveen B. Kumar, Sanjay Mohapatra

Overview

This book gives a scientific and systematic approach to trading in emerging stock markets. As professional traders do not trade purely on the basis of the economic fundamentals, but also take into account market movements generated by other factors (noise trading), knowledge of technical analysis is important to anyone who would like to participate successfully in the stock market. Second, the existence of a skew towards reliance on fundamental analysis at longer horizons suggests that models based on economic considerations will be more important on the long run. Third, the existence of a skew towards reliance on technical analysis at shorter horizons suggests that models based on short term considerations (noise) will be more important in the short term. The present book gives a base for practitioners as well as students to learn the tricks of the trade through examples and case studies.

Product Details

ISBN-13:	9781785604058
Publisher:	Emerald Group Publishing Limited
Publication date:	09/03/2015
Series:	0
Pages:	224
Product dimensions:	6.00(w) x 9.10(h) x 0.70(d)

Table of Contents

List of Tables ix

List of Charts xix

List of Abbreviations xxiii

Abstract xxv

Chapter 1 Introduction 1

1.1 Securities Market in India: An Overview 1

1.1.1 Origin of Indian Stock Market 2

1.1.2 Assessment of Performance of Indian Securities Market (2000-2010) 2

1.1.3 Market Segments 5

1.1.4 Market Participants 5

1.1.5 Secondary Market 5

1.1.6 Cash Market 6

1.1.7 India and International Comparison 6

1.2 Definitions of Technical Analysis and Fundamental Analysis 8

1.3 Importance and Need of the Study 11

1.4 Objectives of the Study 12

1.5 Hypotheses 12

1.6 Research Methodology 14

1.6.1 Sources of Data 14

1.6.2 Sampling Plan 15

1.6.3 Methods of Data Collection 16

1.6.4 Data Analysis Tools and Techniques 18

1.7 Scope and Limitations of the Study 18

1.8 Organisation of the Study 19

Chapter 2 Introduction to Various Approaches 21

2.1 Introduction 21

2.2 Fundamental Approach 21

2.2.1 Discounted Cash Flow Valuation 22

2.2.2 Dividend Discount Models 25

2.2.3 Relative Valuation 28

2.2.4 Value-Added Methods 29

2.3 Technical Approach 30

2.3.1 The Dow Theory 31

2.3.2 Types of Charts 31

2.3.3 Trends 34

2.3.4 Price Pattern 36

2.3.5 Indicators 39

2.3.6 Other Tools and Techniques 44

2.3.7 Sentiment Indicators 46

Chapter 3 Review of Literature 51

3.1 Review of Existing Literature 51

3.2 Research Gap 58

Chapter 4 Data Analysis and Interpretation 63

4.1 Introduction 63

4.2 Demographic Analysis 63

4.2.1 Gender 64

4.2.2 Age Groups 64

4.2.3 Relevant Work Experience 65

4.3 Objective 1 - Time Period Analysis 66

4.3.1 ANOVA One Way Using SPSS 66

4.3.2 Kruskal-Wallis H Test Using SPSS 73

4.4 Objective 2 - Importance Factors' Analysis 87

4.4.1 ANOVA One Way Using SPSS 87

4.4.2 Kruskal-Wallis H Test Using SPSSS 94

4.5 Objective 3 - Complementarity Analysis 114

4.6 Objective 4 - Demographic and Technical and Fundamental Tools Association Analysis 115

4.6.1 Chi-Square Tests 115

4.6.2 Gender versus Analytical Techniques 116

4.6.3 Gender versus Computer Graphics and Services 118

4.6.4 Gender versus Chartist Publication 119

4.6.5 Gender versus Chart Company or Analyst 121

4.6.6 Gender versus Sentiment Indicators 123

4.6.7 Gender versus Earnings Multiple Method 125

4.6.8 Gender versus Discounted Cash Flows Methods 126

4.6.9 Gender versus Dividend Discount Models 129

4.6.10 Gender versus Value Added Concept 130

4.6.11 Age versus Analytical Technique 131

4.6.12 Age versus Computer Graphics and Services 134

4.6.13 Age versus Chartist Publications 137

4.6.14 Age versus Chart Company or Analyst 139

4.6.15 Age versus Sentiment Indicators 140

4.6.16 Age versus Earnings Multiple Methods 143

4.6.17 Age versus Discounted Cash Flows Methods 145

4.6.18 Age versus Dividend Discount Models 148

4.6.19 Age versus Value Added Concepts 150

4.7 Crosstabs 152

4.7.1 Experience (EXP) versus Analytical Techniques 152

4.7.2 Experience (EXP) versus Computer Graphics and Services 154

4.7.3 Experience (EXP) versus Chartist Publications 156

4.7.4 Experience (EXP) versus Chart Company or Analyst 157

4.7.5 Experience (EXP) versus Sentiment Indicators 160

4.7.6 Experience (EXP) versus Earnings Multiple Methods 161

4.7.7 Experience (EXP) versus Discounted Cash Mows Methods 163

4.7.8 Experience (EXP) versus Dividend Discount Models 165

4.7.9 Experience (EXP) versus Value Added Concepts 167

Chapter 5 Conclusions and Recommendations 173

5.1 Objective 1 - Time Period 173

5.2 Objective 2 - Importance Factors 175

5.3 Objective 3 - Complementary 176

5.4 Objective 4 - Demographic and Technical and Fundamental Tools Association 177

5.5 Scope for Future Research 180

Appendices 181

Bibliography 187

Index 195