Indian Journal of Research in Capital Markets

Open Access Open Access  Restricted Access Subscription Access

A Study on Formation of Candlestick Chart Patterns with Respect to the Indian Automobile Sector


Affiliations
1 Department of PG Studies and Research in Management, Karnataka State Akka Mahadevi Women’s University, Vijayapura - 586 107, Karnataka, India
2 Department of Management, Karnataka State Akka Mahadevi Women’s University, Vijayapura - 586 107, Karnataka, India

   Subscribe/Renew Journal


The Indian economic scenario is changing and so are the spending and investment habits of Indian citizens. The investment choices of individual investors have switched from traditional physical assets such as gold, real estate, as well as bank deposits to stocks and other similar assets like bonds, debentures, and derivatives because of increased awareness of alternative investment options, improved technical analysis tools, ease of holding the investment, technological advancements in the form of user-friendly trading platforms, decreasing interest rates on traditional investment options, and the effect of a pandemic such as salary cuts, job losses, and an uncertain economic future, etc. According to a recent survey, the participation of retail investors in NIFTY alone grew to 45% in 2021 from 33% in 2016. The study intended to assist investors in the automobile sector by analyzing the success rate of some selected frequently occurring candlestick patterns and stating the patterns that have a high degree of reliability. The simple percentage analysis of the formations of the selected patterns over five years depicted that the bearish engulfing pattern and the bullish engulfing pattern were the most reliable patterns with a higher rate of success in comparison with the other selected patterns.

Keywords

Automobile Sector, Behavioural Finance, Candlestick Patterns, Investment Decision, Market Efficiency, Technical Analysis.

JEL Classification Codes : G11, G14, G41

Paper Submission Date : September 8, 2022 ; Paper sent back for Revision : September 20, 2022 ; Paper Acceptance Date : September 28, 2022

User
Subscription Login to verify subscription
Notifications
Font Size

  • Chin, C.-L., Jais, M., Balia, S. S., Ahmad, A. C., & Abidin, A. Z. (2016). Candlestick charting and trading volume: Evidence from Bursa Malaysia. International Review of Management and Marketing, 6(8S), 153–165. https://www.econjournals.com/index.php/irmm/article/view/3926

  • Do Prado, H. A., Ferneda, E., Morais, L. C., Luiz, A. J., & Matsura, E. (2013). On the effectiveness of candlestick chart analysis for the Brazilian Stock Market. Procedia Computer Science, 22, 1136–1145. https://doi.org/10.1016/j.procs.2013.09.200

  • Heinz, A., Jamaloodeen, M., Saxena, A., & Pollacia, L. (2021). Bullish and bearish engulfing Japanese candlestick patterns: A statistical analysis on the S & P 500 index. The Quarterly Review of Economics and Finance, 79, 221–244. https://doi.org/10.1016/j.qref.2020.06.006

  • Joseph, G., Das, S. G., & Romeo, A. (2015). A study on the formation of candlestick patterns with reference to Nifty index for the past five years. International Journal of Management Research & Review, 5(2), 67–90.

  • Laxman, B. (2015). Understanding price behaviors by using candlestick charts - A study on selected equities (Thesis). http://hdl.handle.net/10603/171082

  • Lu, T.-H. (2014). The profitability of candlestick charting in the Taiwan stock market. Pacific Basin Finance Journal, 26, 65–78. https://doi.org/10.1016/j.pacfin.2013.10.006

  • Manoharan, M., & Mamilla, R. (2019). Candlestick technical analysis on select Indian stocks: Pattern detection and efficiency statistics. International Journal of Innovative Technology and Exploring Engineering (IJITEE), 9(2), 3140–3143. https://doi.org/10.35940/ijitee.b7666.129219

  • Marshall, B. R., Young, M. R., & Rose, L. C. (2006). Candlestick technical trading strategies: Can they create value for investors? Journal of Banking & Finance, 30(8), 2303–2323. https://doi.org/10.1016/j.jbankfin.2005.08.001

  • Nison, S. (1991). Japanese candlestick charting techniques. New York Institute of Finance.

  • NSE Indices. (n.d.). Nifty auto. https://www.niftyindices.com/indices/equity/sectoral-indices/nifty-auto

  • Prasad, K., & Murugaiah, V. (2018). An evaluation of single line Japanese candlestick strategies in the Indian equity market. International Journal of Money, Banking and Finance, 7(3), 18–23.

  • Son, N. T., Van Thanh, L., Ban, T. Q., Hoa, D. X., & Anh, B. N. (2018). An analyse on effectiveness of candlestick reversal patterns for Vietnamese stock market. In, Proceedings of the 2018 International Conference on Information Management and Management Science (pp. 89–93). https://doi.org/10.1145/3277139.3277161


Abstract Views: 218

PDF Views: 0




  • A Study on Formation of Candlestick Chart Patterns with Respect to the Indian Automobile Sector

Abstract Views: 218  |  PDF Views: 0

Authors

Anusha S. Sangondimath
Department of PG Studies and Research in Management, Karnataka State Akka Mahadevi Women’s University, Vijayapura - 586 107, Karnataka, India
S. B. Kamashetty
Department of Management, Karnataka State Akka Mahadevi Women’s University, Vijayapura - 586 107, Karnataka, India

Abstract


The Indian economic scenario is changing and so are the spending and investment habits of Indian citizens. The investment choices of individual investors have switched from traditional physical assets such as gold, real estate, as well as bank deposits to stocks and other similar assets like bonds, debentures, and derivatives because of increased awareness of alternative investment options, improved technical analysis tools, ease of holding the investment, technological advancements in the form of user-friendly trading platforms, decreasing interest rates on traditional investment options, and the effect of a pandemic such as salary cuts, job losses, and an uncertain economic future, etc. According to a recent survey, the participation of retail investors in NIFTY alone grew to 45% in 2021 from 33% in 2016. The study intended to assist investors in the automobile sector by analyzing the success rate of some selected frequently occurring candlestick patterns and stating the patterns that have a high degree of reliability. The simple percentage analysis of the formations of the selected patterns over five years depicted that the bearish engulfing pattern and the bullish engulfing pattern were the most reliable patterns with a higher rate of success in comparison with the other selected patterns.

Keywords


Automobile Sector, Behavioural Finance, Candlestick Patterns, Investment Decision, Market Efficiency, Technical Analysis.

JEL Classification Codes : G11, G14, G41

Paper Submission Date : September 8, 2022 ; Paper sent back for Revision : September 20, 2022 ; Paper Acceptance Date : September 28, 2022


References





DOI: https://doi.org/10.17010/ijrcm%2F2022%2Fv9i2-3%2F172552