Vol.: 02 Issue: 01 & 02: Analysis of Stock Price Movement through Technical Analysis: A Study on Listed Multinational Companies in Dhaka Stock Exchange

Sultan Ahmed:

Professor Department of Business Administration, Bangladesh Islami University, Dhaka. Email: [email protected]

Keywords

Technical Analysis, Investment decision, MACD, MFI, RSI, William%R, Sell-Buy signals of securities.

JEL Classification:

E44, G3, N2, P33

Abstract

Investment is never risk-free. Every investment requires extensive study, analysis of scopes and potentialities, and an effective plan to optimize the return. Analysis is a must when deciding to choose a particular company's shares for investment. Technical analysis is a security analysis technique to forecast the future price trends of a share that aids the investors in anticipating what is possible to happen to prices over a short-run time. This paper aims to carry out a technical analysis of the listed Multinational Companies in the DSE. Researchers have used tools like MACD, RSI, MFI, William % R, and Price Trend Line to predict the projected future trends of the selected securities. It has been found that TA is very useful in investment decisions, and tools like Trendline, MACD, and RSI give clear investment signals in different signal points. Also found that signals from MFI indicators help make investment decisions but William%R is a little bit volatile. Investors should have proper knowledge of TA tools so that they would be able to interpret the sell-buy signals properly, and could be trained to use the TA tools. Signals of every tool should be cross-checked for the validity of the signals. Investors should properly interpret the uptrend, downtrend, or sideways signals and should compare signals given by all the tools.