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Candlestick Patterns in Indian Stocks: 2008-2017

This paper examines whether using candlestick chart patterns can help investors in the Indian stock market earn higher returns than a basic buy-and-hold strategy from 2008-2017. It analyzes the performance of long white candles, long black candles, and white marubozu patterns using data from the BSE Sensex index. The study finds that candlestick charting only outperformed the buy-and-hold strategy in 3 of the 10 years and was generally not profitable, suggesting candlestick patterns do not reliably predict stock movements in the Indian market during this period.

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Ravinder Kumar Arora
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207 views1 page

Candlestick Patterns in Indian Stocks: 2008-2017

This paper examines whether using candlestick chart patterns can help investors in the Indian stock market earn higher returns than a basic buy-and-hold strategy from 2008-2017. It analyzes the performance of long white candles, long black candles, and white marubozu patterns using data from the BSE Sensex index. The study finds that candlestick charting only outperformed the buy-and-hold strategy in 3 of the 10 years and was generally not profitable, suggesting candlestick patterns do not reliably predict stock movements in the Indian market during this period.

Uploaded by

Ravinder Kumar Arora
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Testing Predictive Value of Candlestick Chart Patterns in the Indian Stock

Market

Abstract
Candlestick charting is the oldest known form of technical analysis. It generates signals using the

relationship between open, high, low and close prices. This paper examines whether an investor

in India can use candlestick charts to earn a return higher than that resulting from a simple buy

and hold strategy. The sample data consists of the values of the BSE-Sensex for the 10-year

period 2008-2017. Out of the many candlestick chart patterns that can be formed, the present

study considers only long white candlestick, long black candlestick, and white marubozu as these

are the patterns that occur most frequently in the Indian stock market. The study finds that in

only three out of ten years, the trading strategy using candlestick chart patterns outperforms the

simple buy-and-hold strategy. The results show that candlestick charting is not profitable in the

Indian stock market during the period 2008-2017.

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