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Improving stock market prediction accuracy using sentiment and technical analysis

Research output: Contribution to Journal/MagazineJournal articlepeer-review

E-pub ahead of print
  • Shubham Agrawal
  • Nitin Kumar
  • Geetanjali Rathee
  • Chaker Abdelaziz Kerrache
  • Carlos T. Calafate
  • Muhammad Bilal
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<mark>Journal publication date</mark>26/06/2024
<mark>Journal</mark>Electronic Commerce Research
Publication StatusE-pub ahead of print
Early online date26/06/24
<mark>Original language</mark>English

Abstract

The utilization of sentiment analysis as a method for predicting stock market trends has gained significant attention recently, especially during economic crises. This research aims to assess the predictive accuracy of sentiment analysis in the stock market by constructing a reinforced model that integrates both sentiment and technical analysis. While prior studies have concentrated on social media sentiment for stock price prediction, this research introduces an enhanced model that combines sentiment analysis with technical indicators to improve the precision of stock market prediction. The study creates and evaluates predictive models for stock prices and trends using a substantial dataset of tweets from twenty prominent companies. Finally the re-enforced model has been developed and tested on the stock prices of: Apple, General Electric, Ford Motors and Amazon. The deliberate selection of these companies, each representing distinct industry sectors, serves a dual purpose. It not only facilitates a practical evaluation of our model across diverse market conditions but also ensures computational feasibility, allowing for a focused and detailed analysis of the model’s predictive accuracy and reliability in various economic landscapes. The study’s outcomes offer valuable insights into the effectiveness of the reinforced model, which combines sentiment and technical analysis to predict stock market movements, providing a more comprehensive approach to understanding market sentiment’s influence on stock prices. Furthermore, these findings contribute to the existing knowledge on stock market prediction techniques and emphasize the importance of considering multiple factors in decision-making.

Bibliographic note

Publisher Copyright: © The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature 2024.