Abstract
- All investors seek to identify an investment strategy that can consistently beat the stock market. Many investors believe that technical analysis provides optimal buy and sell signals that can be used to outperform the stock market. However, all investors do not agree on the effectiveness of technical analysis. Technicians believe that technical analysis based on historical price and volume information can be used to create a strategy that outperforms the market. Proponents of the efficient market hypothesis maintain that all historical information is instantly reflected in stock prices. Accordingly, investment strategies based on technical analysis do not outperform the market and investors would earn a higher return by following a simple buy and hold strategy.