Technical Analysis - Myth or Magic?

Master's Thesis from the year 2010 in the subject Business economics - Banking Stock Exchanges Insurance Accounting grade: 1 Sheffield Hallam University (Sheffield Business School) language: English abstract: Table of contentTABLE OF FIGURES..................................................................................................IGLOSSARY...............................................................................................................II1. INTRODUCTION 12. SHARE ANALYSIS AND ITS PREMISES 52.1 CLASSIFICATION AND DEVELOPMENT 52.2 DOW THEORY IN CORRESPONDENCE WITH TA 62.2.1 The Averages Discount Everything (except 'Acts of God') 62.2.2 The Three Trends 72.2.3 The History repeats itself 102.2.4 Criticism of the Dow Theory 112.3 RANDOM WALK THEORY IN CORRESPONDENCE WITH BHS 122.3.1 Criticism of the Efficient Market Hypothesis 152.4 FUNDAMENTAL ANALYSIS 172.5 TECHNICAL ANALYSIS VERSUS FUNDAMENTAL ANALYSIS 173. METHODOLOGY 203.1 TEST CONDITIONS 203.2 TESTED INDICES 234. INSTRUMENTS OF TECHNICAL ANALYSIS 254.1 INDICATORS 254.1.1 Moving Averages 254.1.2 Moving Average Convergence Divergence 264.1.3 Bollinger Bands 274.2 OSCILLATORS 284.2.1 The dilemma of Oscillators 284.2.2 Momentum 284.2.3 Relative Strength Index 304.2.4 Slow Stochastic 314.2.5 Combination of Indicators and Oscillators 324.3 APPROACH TO PERFORMANCE TESTS 325. RESULTS/FINDINGS 345.1 BHS 345.2 EMA 355.3 MACD 365.4 BOLLINGER BANDS 375.5 MOMENTUM 385.6 RSI 395.7 SLOW STOCHASTIC 406. ANALYSIS 416.1 EMA 416.2 MACD 436.3 BOLLINGER BANDS 446.4 MOMENTUM 456.5 RSI 476.6 SLOW STOCHASTIC 487. CONCLUSION 508. APPENDIX 539. REFERENCES 71