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Price exhaustion and number preference : time and price confluence in Australian stock prices
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.
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Journal
European journal of financeVolume
11Issue
3Pagination
207 - 222Publisher
RoutledgeLocation
London, EnglandISSN
1351-847XeISSN
1466-4364Language
engPublication classification
C1 Refereed article in a scholarly journalCopyright notice
2005, RoutledgeUsage metrics
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