Profitability of technical analysis in the Egyptian Stock Exchange

Document Type : Original Article

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Business Administration Department Faculty Of Commerce Alexandria University Alexandria Egypt

Abstract

Although technical trading rules have been widely used by practitioners in financial markets, their profit-ability still remains controversial in academic studies.This paper investigate the profitability of moving averages (M-A), Moving average convergence divergence (MACD), relative strength index (RSI), stochastic (K), and Bollinger bands (BB) in the Egyptian Stock Exchange from 1998 to 2017.And its ability to outperform the  passive strategy “Buy and Hold”.In addition to test the combined  signal approach (CSA), and compare its performance using the tepchnical analysis tools individually The T test and Bootstrap methodology used to test the ability of technical analysis tools to achieve abnormal returns. Also the Mann Whitney test used to comparemeans.We find that technical analysis tools can achieve abnormal returns that can outperform buy and hold strategy (except for the BB).And the results support the superiority of the combined signal approach for on the use of technical analytical tools individually.chnical analysis tools individually.

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