Technical Analysis (TA) is a security analysis methodology based on the study of past market data. Although it has been criticized by academics and the profitability of many related strategies has been statistically rejected, TA remains highly popular among practitioners and retail investors, in...

This paper is an empirical investigation of the relation between the dispersion on analysts' earnings forecasts and the future performance following a change in the nominal price of shares. On a sample of US splits occurred from 1993 to 2013, we observe a change in the distribution of analysts'...

Most existing studies conclude that the accuracy of analysts' target prices is questionable. In forecasting target prices, analysts estimate a future stock price under the constraint of a time frame of usually 12 months. We exclude this source of uncertainty by focusing on valuations in takeover...

This paper studies how security analysts use industry-level and firm-specific information in issuing firms' earnings forecasts. Analysts who use more (less) industry-level (firm-specific) information have less available resources and incentives to allocate effort towards costly firm-specific...

Modern Portfolio Theory, the Capital Asset Pricing Model, and the Efficient Market Hypothesis are cornerstone concepts in both academic and professional curricula. In spite of their long history and reputation, the CAPM and its extensions do not yield satisfactory empirical results. We argue...

In this study we extracted the linguistic tones of managers and analysts during earnings conference calls and compared the differences between them. We found that manager tones convey much more optimism (less pessimism) than their analyst counterparts and investors (particularly institutional...

The purpose of this paper is to examine if even the simplest trading rules could take advantage of the market's inefficiency and lead to profitable trading decisions. For this reason we examine the profitability of the simplest trading rules, using only the simple moving averages (SMA) rules...

The value of technical analysis (TA) has been debated for decades; however, limited evidence exists on the profitability of investment recommendations issued by technical analysts. These ‘chartists' sometimes claim that TA is an art rather than a science. We evaluated more than 5000 TA-based...

In this paper we test the hypothesis that sell recommendations are costlier than buy recommendations by carrying out cointegration analyses. We find that that analyst recommendations that plainly urge the investor to take action (buy, sell) are consistent with their estimated losses (gains)....

We investigate the causal impacts of air pollution on analyst forecast accuracy around earnings announcements. Using the air quality index in analyst workplaces, we provide direct evidence of the following. First, air pollution significantly reduces analysts' earnings forecast accuracy in...