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What is not a reason technical analysis might be profitable? A. Efficient markets hypothesis validates the...

What is not a reason technical analysis might be profitable?

A. Efficient markets hypothesis validates the use of technical analysis
B. Stock prices may move in trends that can be identified using certain indicators
C. Technical indicators may indicate changes in supply and demand of a security would affect price trends
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Answer #1

Answer (A) Efficient markets hypothesis validates the use of technical analysis

The efficient market hypothesis (EMH) suggests that markets are informationally efficient. This means that historical prices and expectations are already priced into investments and that it's not possible to exceed market-average returns by looking at past price data. Since technical analysis is completely predicated on the concept of using past data to anticipate future price movements, the EMH is conceptually opposed to technical analysis.

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