1. 1980 - 1989
2. 1990 - 1999
3. 2000 - 2009
From the above findings, we learned:
- except the first chart, first few years are consolidation years whereby prices are lower compared to the later years.
- prices tend to double from the year 0 to the peak. In the 80's KLCI started with 200 and reached a peak at almost 500 in 1987; In the 90's KLCI started with 600 and ended up at 1200 in 1997; Except in 2000, KLCI started with 1000 and reached a peak at 1400, but if you were to count from the low of 600 in 2001, it was more than double.
- In the 10 year period, there are phases of consolidation whereby prices move within a tight range before a breakout either to the upside or the downside.
- The crash is usually steeper and the duration is shorter than the bull trend.
There are many reasons for the way stock prices behave, in the technical analysis perspective, it is assumed that history repeats itself, from the past data we can predict future price movement.
Having said that we have to acknowledge the importance of knowing the fundamental analysis too. The best trader will use both in their analysis.