Profiting from Technical Analysis in Indian Equity Markets: Using Moving Averages

XLRI Jamshedpur School of Business Working Paper No. 06-02

20 Pages Posted: 18 Apr 2006

See all articles by Ram Kumar Kakani

Ram Kumar Kakani

Lal Bahadur Shastri National Academy of Administration (LBSNAA)

Shyam Sundhar

XLRI Jamshedpur

Date Written: March 2006

Abstract

This study employs the Simple Moving Average (SMA) and the Displaced Moving Average (DMA) trading rules to test the weak form efficiency of the Indian equity markets. The indicators were applied on the S&P CNX Nifty, BSE Sensex as well as multiple individual stocks for a time period spanning 15 years (1991-2005). Our results provide sufficient evidence that the DMA indicator is a highly successful trading rule that generated profitable signals even after adjusting for transaction and other costs.

Keywords: Moving Averages, India, Stock Market, Technical Analysis, Trading, and Efficient Markets

JEL Classification: g14, g10

Suggested Citation

Kakani, Ram Kumar and Sundhar, Shyam, Profiting from Technical Analysis in Indian Equity Markets: Using Moving Averages (March 2006). XLRI Jamshedpur School of Business Working Paper No. 06-02, Available at SSRN: https://ssrn.com/abstract=889515 or http://dx.doi.org/10.2139/ssrn.889515

Ram Kumar Kakani (Contact Author)

Lal Bahadur Shastri National Academy of Administration (LBSNAA) ( email )

Mussorie, Uttarakhand 248179
India

Shyam Sundhar

XLRI Jamshedpur ( email )

C H Area (E)
Jamshedpur, Jharkhand 831001
India

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