The weak form of the EMH is generally confirmed by research evidence.

Question

Quizplus · Accepted Answer

The results of the tests of independence and trading rules would seem to uphold the weak form of the efficient market hypothesis. Security prices do appear to be independent over time or, more specifically, move in the pattern of a random walk. Some challenge the research on the basis that academic research in this area does not capture the personal judgment an experienced technician brings forward in reading charts. There is also the fact that there are an infinite number of trading rules, and not all of them can or have been tested. Nevertheless, research on the weak form of the EMH still seems to suggest that prices move independently over time, that past trends cannot be used to easily predict the future, and that charting and technical analysis may have limited value.

The Weak Form of the EMH Is Generally Confirmed by Research