TECHNICAL ANALYSIS: ITS APPLICABILITY TO PROPERTY SHARES LISTED ON THE STOCK EXCHANGE OF SINGAPORE

Abstract

Property and shares are the two most popular areas of investment activity for a substantial portion of the population. Even for institutional investors who have the expertise and financial resources to invest in more sophisticated financial instruments, the performance of the share and property markets is still of great importance. Since the movement of the share market can create repercussions on other economic activity, investors have often tried to part the mists of the future and outguess the psychology of the market in order to stay one step ahead. Technical analysis is one of the most often used tools in answering the question of timing. The Efficient Market Hypothesis states that extraordinary profits cannot be made if market prices follow a random walk. However, practitioners of technical analysis claim that trading rules provide greater returns than a simple buy and hold strategy. There is evidence to show that above—average profits can be consistently made by certain investors. This proves that the Random Walk Hypothesis does not preclude extraordinary gains.