Wednesday 28 October 2009

Past Market Movements: Irregular Price Patterns

Examination of Past Market Movements of Malaysia KLSE

What can we learn from the history of overall market movements in the Malaysia KLSE?

1. Generally Upward Trend
2. Trends Not Consistent
3. Irregular Price Patterns
4. Prices Can Be Very Volatile
5. Prices Move Volatile Upward
6. Big Booms Are Irregular

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4. Irregular Price Patterns.

Although the price movements appear to be centered around the trend lines, they do not appear to be regular. Small troughs can be followed by big peaks and vice versa.

The period in which the market prices stay above or below the trend line is not regular either.

The market can stay under or overvalued for some years.

This means that it is probably very difficult to predict accurately the direction of market movements over the short run.

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