The Impact of Technical Analysis on Investors’ Financial Decisions in an Emerging Market: Evidence from the Egyptian Stock Market

Abstract

This paper aims to examine the impact of technical indicators on the behaviors of investors in the Egyptian stock market from 2019-2022. Technical indicators are widely used to understand and predict market trends and behaviors. The study evaluates how technical indicators shape the investment decisions of individual investors and institutional investors. The study adopts a research design, using quantitative data analysis approaches. The quantitative part of the research uses descriptive, correlation, and regression statistics to analyze the stock market data retrieved from the Egyptian Stock market database. Meanwhile, the study found that technical indicators have a significant impact on investor behaviors, with institutional investors relying more on technical indicators than individual investors. Moreover, the findings reveal that there are additional factors, such as market sentiment, political climate, and the economic environment, that also impact investment decisions. As such, the paper concludes that technical indicators should only be used as one of many factors in determining investment strategies, in conjunction with broader macroeconomic and market conditions.