While the topic has been widely studied (indeed it has many times been tossed aside and scorned by academics), there are just enough papers that finds it works (see Lo, Mamaysky and Wang (2000)) that when coupled with the continual use of technical analysis, the effectiveness remains in debate.
Bajgrowicz and Scaillet examine this interesting question and find the answer is No and especially after transaction costs are included.
From their paper:
"...revisit the apparent historical success of technical trading rules on daily prices of the Dow Jones index. First, we use the False Discovery Rate as a new approach to data snooping. The advantage of the FDR over existing methods is that it is more powerful and not restricted only to the best rule in the sample. Second, we perform persistence tests and conclude that an investor would not have been able to select ex ante the future best-performing rules. Finally, we show that the performance fully disappears once transaction costs are taken into account."
Cite: Bajgrowicz, Pierre and Scaillet , O., "Technical Trading Revisited: Persistence Tests, Transaction Costs, and False Discoveries" (January 1, 2008). Swiss Finance Institute Research Paper No. 05-08 Available at SSRN: http://ssrn.com/abstract=1095202