Accuracy Level of Technical Analysis Indicators: Case on the Stock Prices of Telecommunication Companies Listed in the Indonesian Stock Exchange

Muhammad Benarbia Ramadhan, Aryono Yacobus

Abstract


This study aims to test and provide empirical evidence of the accuracy of technical analysis indicators Moving Average Convergence Divergence, Bollinger Bands, and Stochastic Oscillators in predicting the direction of stock price movements. This research focuses on stocks listed on the Telecomunication Subsector with observation intervals from January to December 2022. The research data was obtained from the tradingview.com platform. The Mann-Whitney Non-parametric test is used to test research hypotheses regarding the accuracy of the Moving Average, Bollinger Bands, and Stochastic Oscillator indicators which can statistically prove whether there is a difference between the predicted price and the actual indicator price. The results showed that there was no difference between the predictions of the direction of stock price movements produced by the three indicators and actual prices, which means that the three indicators are accurate. From the results of the analysis and comparison of the performance of the three indicators from the number of signals and the average level of return, it can be concluded that the Relative Strength Index indicator has a more optimal rate of return than the other two indicators. The results of this research can be a reference for capital market investors in choosing technical analysis methods that can help make more appropriate investment decisions.

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