Faculty Publications

The Trend Is An Analyst's Friend: Analyst Recommendations And Market Technicals

Document Type

Article

Keywords

analyst recommendations, market technicals, moving averages

Journal/Book/Conference Title

Financial Review

Volume

56

Issue

2

First Page

301

Last Page

330

Abstract

In this paper, I assess the empirical relation between analyst recommendation decisions and market technicals. Research shows market technicals have predictive content that leads to abnormal returns. Recent survey evidence, however, shows analysts' rank technical signals as having relatively little usefulness in forming their recommendations, leading them to underweight the information content of technical signals. I find lagged positive stock price trends are associated with a greater likelihood of consensus recommendation upgrade. Furthermore, I show market technicals enhance the investment value of consensus recommendations. Overall, I demonstrate that market technicals are an important complement to analyst recommendations.

Department

Department of Finance

Original Publication Date

5-1-2021

DOI of published version

10.1111/fire.12251

Repository

UNI ScholarWorks, Rod Library, University of Northern Iowa

Language

en

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