A study on the comparison of technical indicators used in stock price prediction with the FAHP method

Bilal Akkaynak

doi:10.15637/jlecon.1954

Authors

Bilal Akkaynak Erzincan Binali Yıldırım University/ Türkiye https://orcid.org/0000-0003-1300-2112

DOI:

https://doi.org/10.15637/jlecon.1954

Keywords:

Stock, Technical Analysis, Indicators, FAHP

Abstract

Savers want to direct their savings to investment areas where they can get maximum efficiency. This is the most basic feature that a rational investor should have. Stock investors also want to manage their investments with this thought. In this respect, investors conduct detailed research on the sector and stock they plan to invest in. Predictions regarding the possible price formation of the stock in the future is one of these studies. In the finance literature, there are many indicators, ratios, analyzes, indicators and oscillators developed for the future price prediction of the stock. In this study, technical indicators used by licensed professional stock investors were obtained by taking expert opinion. These indicators were conveyed to the experts again to get their opinions with the help of the fuzzy comparison matrix and the experts were asked to compare the variables. The data obtained were analyzed with the Fuzzy Analytical Hierarchy Process (FAHP) method and the technical indicators and ratios used by the experts were listed according to a certain hierarchy. As a result of the analysis, it has been determined that the most important ratio in the stock price estimation process is the MV/BV ratio. While EBIT is the second most important ratio in stock price prediction, P/E is the third most important indicator.Savers want to direct their savings to investment areas where they can get maximum efficiency. This is the most basic feature that a rational investor should have. Stock investors also want to manage their investments with this thought. In this respect, investors conduct detailed research on the sector and stock they plan to invest in. Predictions regarding the possible price formation of the stock in the future is one of these studies. In the finance literature, there are many indicators, ratios, analyzes, indicators and oscillators developed for the future price prediction of the stock. In this study, technical indicators used by licensed professional stock investors were obtained by taking expert opinion. These indicators were conveyed to the experts again to get their opinions with the help of the fuzzy comparison matrix and the experts were asked to compare the variables. The data obtained were analyzed with the Fuzzy Analytical Hierarchy Process (FAHP) method and the technical indicators and ratios used by the experts were listed according to a certain hierarchy. As a result of the analysis, it has been determined that the most important ratio in the stock price estimation process is the MV/BV ratio. While EBIT is the second most important ratio in stock price prediction, P/E is the third most important indicator.

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