Price exhaustion and number preference : time and price confluence in Australian stock prices

Doucouliagos, Chris 2005, Price exhaustion and number preference : time and price confluence in Australian stock prices, European journal of finance, vol. 11, no. 3, pp. 207-222.

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Title Price exhaustion and number preference : time and price confluence in Australian stock prices
Author(s) Doucouliagos, Chris
Journal name European journal of finance
Volume number 11
Issue number 3
Start page 207
End page 222
Publisher Routledge
Place of publication London, England
Publication date 2005-06
ISSN 1351-847X
1466-4364
Keyword(s) price exhaustion
number preference
confluence
Summary Confluence occurs when different trading filters generate signals that point to the same directional move. Using regression analysis, this paper investigates confluence trading signals associated with number preference and price exhaustion, for a sample of Australian stocks. The results show that certain price levels tend to act as psychological barriers, and that price exhaustion signals are a real phenomenon in the Australian stock market. It is shown also that confluence exists in the Australian stock market. Importantly, confluence is associated with price retracements that are of economic and statistical significance, offering profitable trading opportunities. The results suggest that Australian stocks do not follow a random walk.
Language eng
Field of Research 140207 Financial Economics
HERDC Research category C1 Refereed article in a scholarly journal
Copyright notice ©2005, Routledge
Persistent URL http://hdl.handle.net/10536/DRO/DU:30002903

Document type: Journal Article
Collection: School of Accounting, Economics and Finance
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