The research tested a group of hypothesis mainly to find if there is a correlation between the technical and financial indicators and changes in the stock prices. Also if there is a correlation between the technical and financial indicators.
Testing the research hypothesis revealed that there is a correlation between the stock price and its book value for 77% of the companies and also a correlation between the changes in PE ratio and changes in stock prices. It was clear that the Saudi Market does not react to financial data quickly as it is found that the changes in stock prices is not correlated with the financial indicators during the period of announcing the quarterly results, however such relationship is correlated on the long run.
It was concluded that there is a correlation between changes in stock prices and some technical indicators especially during the 2 days preceding a significant change in prices, while there is a correlation between other technical indicator and the stock’s closing price on the day following the significant change in the stock’s price. There is a correlation between some financial indicators and some technical indicators. The study recommends the search for variables other than those relying on technical and financial indicators to stand on the reasons behind such fluctuation in the Saudi Stock market.