Psychological Barriers in Asian Equity Markets

International Federation of Technical Analysts' Journal, 2013 Edition

7 Pages Posted: 27 Mar 2013

See all articles by Lim Kai Jie Shawn

Lim Kai Jie Shawn

University College London - Department of Economics

Lim Si Jie Bryan

University of Cambridge - Department of Engineering

Date Written: March 27, 2013

Abstract

In this study, we investigate the presence of psychological barriers in the equity indices of 10 Asian Markets over a 10 year period from 2001-2011. This investigation was conducted through the use of uniformity tests, barrier proximity tests and tests on the predictability of stock returns. We have found evidence for barriers at the 1000 level for 6 of these markets (JKSE, KLSE, N225, STI, KS11, TWII) and at the 100 level for 4 of these markets (AORD, JKSE, KLSE, STI). However, while there may be evidence of psychological barriers, there is little evidence for the predictability of stock returns induced by the presence of these psychological barriers.

Keywords: psychological barriers, asian equity markets, round numbers

Suggested Citation

Kai Jie Shawn, Lim and Bryan, Lim Si Jie, Psychological Barriers in Asian Equity Markets (March 27, 2013). International Federation of Technical Analysts' Journal, 2013 Edition. Available at SSRN: https://ssrn.com/abstract=2240145

Lim Kai Jie Shawn (Contact Author)

University College London - Department of Economics ( email )

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom

Lim Si Jie Bryan

University of Cambridge - Department of Engineering ( email )

Cambridge
United Kingdom

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