Do psychological barriers exist in Latin American stock markets?

• Type: Article in International Scientific Journal
• Date: 2020

Authors

Júlio Lobão (Author) FEP; Natércia Fortuna (Author) FEP; Franklin Silva (Author) Other

Journal

Title: Revista de Analisis Economico

Vol. 35 No. 2

Pages: 29-56

ISSN: 0716-5927

Publisher: Universidad Alberto Hurtado/School of Economics and Bussines

Indexing

Scopus - 0 Citations

SciELO - Scientific Electronic Library Online

Latindex

EBSCO

Scientific classification

CORDIS: Social sciences > Economics > Financial science

FOS: Social sciences > Economics and Business

Other information

Authenticus ID: P-00S-VVN

DOI: 10.4067/S0718-88702020000200029

Abstract (EN): We examine for the first time the major stock markets of eight Latin American countries for indication of psychological barriers at round numbers. We test for uniformity in the trailing digits of the indices and use regression and GARCH analysis to assess the differential impact of being above or below a possible barrier. The Chilean stock market seems to be significantly different from its counterparts as it is the only one that showed virtually no signs of psychological barriers. There is mild to strong evidence of barriers in the remaining markets. These findings challenge the notion that most Latin American markets are unpredictable and lend credit to the claim that technical analysis strategies can be useful in some of these markets.

Language: English

Type (Professor's evaluation): Scientific