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Technical and Fundamental Trading in the Chinese Stock Market: Evidence Based on Time-Series and Panel Data

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  • Imad Moosa
  • Larry Li

Abstract

Time-series and panel data are used to provide empirical evidence on technical and fundamental trading in the Chinese stock market. An econometric model is used to differentiate between the effect on stock prices of the actions of traders who act on the basis of fundamental analysis (financial ratios) and those acting on the basis of technical analysis. The model is estimated using monthly data on the stock prices of 100 companies listed on the Shanghai Stock Exchange. The results obtained from time series regressions show mixed results for the effectiveness of fundamental trading and overwhelming support for the effectiveness of technical trading. However, panel regressions show that both technical and fundamental trading have roles to play in determining stock prices, but technical trading is more effective.

Suggested Citation

  • Imad Moosa & Larry Li, 2011. "Technical and Fundamental Trading in the Chinese Stock Market: Evidence Based on Time-Series and Panel Data," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 47(0), pages 23-31, January.
    • Handle: RePEc:mes:emfitr:v:47:y:2011:i:0:p:23-31
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    Citations

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    Cited by:

    1. Yan-Ting Lin & Shang-Chi Gong & Sou-Shan Wu & Tsung-Pei Lee, 2012. "E/P Mean Reversion-Based Strategies for Investment Practice: Evidence from the Taiwan Market," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 48(1), pages 117-131, January.
    2. Jamal Bouoiyour & Refk Selmi, 2016. "The responses of BRICS Equities to China's Slowdown: A Multi-Scale Causality Analysis," Working Papers hal-01880323, HAL.
    3. Hakan Er & Adnan Hushmat, 2017. "The application of technical trading rules developed from spot market prices on futures market prices using CAPM," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 7(3), pages 313-353, December.

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