Highs and lows: a behavioural and technical analysis

We find that turnover rises on n-day highs and lows and is an increasing function of n. We offer several explanations from the technical and behavioural finance literature for why traders might use these signals. Turnover is persistent following these events, and new lows provide abnormal returns for up to 6 trading days. 'Technical analysis is about as useful as going to a fortuneteller, as far as I'm concerned. There is simply no evidence that these patterns mean anything…'1 (Burton Malkiel, 2003).