Are 52- Weeks High-low Prices Good Indicators of Opening Prices? An Experiment with Panel Data

Abstract

52 weeks high and low prices of stocks are commonly used to get an idea of the price behaviour of stock market. However, this paper is an attempt to analyse the impact of these last year high and low prices on the opening price of the next year. As Housman specification test result is 36.21 we have used pooled regression as well as panel regression with fixed effect model. We run our experiments in relation to Sensex and 6 industries consisting of JO companies each. We found positive impact of Sensex over companies within the industries like Electricity, Food & Beverage and Non-metallic products. However, for Textile, Mining and other Services we found insignificant effect. The ref ore, we are not in a position to generalise that 52-Weeks' High-low Prices are good indicators of opening Prices.