Candlestick technical trading strategies: Can they create value for investors?

We conduct the first robust study of the oldest known form of technical analysis, candlestick charting. Candlestick technical analysis is a short-term timing technique that generates signals based on the relationship between open, high, low, and close prices. Using an extension of the bootstrap methodology, which allows for the generation of random open, high, low and close prices, we find that candlestick trading strategies do not have value for Dow Jones Industrial Average (DJIA) stocks. This is further evidence that this market is informationally efficient.