LIMITATIONS OF TECHNICAL ANALYSIS -STUDY OF SELECTED STOCKS

Abstract

This article examines the effectiveness and limitations of technical analysis in predicting future stock performance. The study focuses on evaluating the accuracy of the Simple Regression model and the moving average method, comparing the findings with previous studies, and analyzing the strengths and weaknesses of technical analysis. The research findings indicate that these methods are not accurate predictors, as there is a significant difference between the predicted and actual values. The implications of these findings suggest that technical analysis should be supplemented with other forms of analysis, such as fundamental analysis, for more accurate stock price predictions. Reflection on the research goal and objectives highlights the successful achievement of investigating the effectiveness of technical analysis. Suggestions for future research include integrating multiple technical indicators, incorporating machine learning and artificial intelligence, exploring alternative market data, conducting long-term analysis, and investigating cross-market analysis. By considering these recommendations and continuously improving technical analysis methodologies, investors and traders can enhance their decision-making processes and improve their chances of success in the dynamic world of financial markets.