midterm mcqs to memorize Flashcards
Which of the following would LEAST likely be a continuation pattern?
a. Flag
b. Ascending triangle
c. Broadening formation
d. Inverse head and shoulders
d. Inverse head and shoulders
- According to Dow Theory, secondary corrections can most likely be replaced by a
a. flag.
b. line.
c. wedge.
d. triangle.
b. line.
Which of the following would be the LEAST important factor in determining the significance of a trendline?
a. Duration
b. Angle of ascent or descent
c. Distance from current price
d. Number of times touched by prices
c. Distance from current price
What is most likely indicated when Bollinger Bands narrow?
a. A stock is ready for a rally.
b. A stock is ready for a decline.
c. A stock’s volatility has increased.
d. A stock’s volatility has decreased.
d. A stock’s volatility has decreased.
Which of the following does NOT represent a sell signal confirmation for Dow Theory?
a. The Dow Jones Industrials and the Dow Jones Transportation indexes peak simultaneously.
b. The Dow Jones Industrials and the Dow Jones Transportation indexes fail to confirm at the highs.
c. Both the Dow Jones Industrials and the Dow Jones Transportation indexes break below an important intermediate term support level.
b. The Dow Jones Industrials and the Dow Jones Transportation indexes fail to confirm at the highs.
Point and figure charts are LEAST likely suited for
a. establishing targets.
b. identifying breakouts.
c. identifying areas of support and resistance.
d. identifying areas of accumulation or distribution.
d. identifying areas of accumulation or distribution.
Using moving averages to signal buy/sell decisions can result in a number of whipsaws in
a. up trending markets.
b. down trending markets.
c. sideways trending markets.
c. sideways trending markets.
Which of the following is usually associated with major market tops?
a. A pennant pattern
b. Ascending triangles
c. An extended third wave
d. A broadening formation
d. A broadening formation
Which of the following types of gaps is LEAST likely to be filled when it occurs with high volume?
a. Common
b. Runaway
c. Breakaway
d. Exhaustion
c. Breakaway
Regarding trends, which of the following statements is NOT correct?
a. Always trade with the trend.
b. A trendline break is at least a warning of a changing trend.
c. Breakouts from support/resistance are usually a change in trend.
d. The longer the trend, the more difficult it is to identify its reversal.
d. The longer the trend, the more difficult it is to identify its reversal.
Symmetrical triangles
a. are also called coils.
b. are usually broadening patterns.
c. represent the acceleration of an existing trend.
a. are also called coils.
Which of the following statements regarding moving averages is NOT correct? Longer term moving averages
a. give fewer buy and sell signals than shorter term moving averages.
b. are better at giving signals at major tops than shorter term moving averages.
c. give back a lot more when the trend reverses than shorter term moving averages.
b. are better at giving signals at major tops than shorter term moving averages.
Symmetrical triangle price patterns should generally be accompanied by
a. consistent volume within the pattern.
b. a gradual decline in volume until the breakout.
c. heavier volume in the direction of the eventual breakout.
d. no discernible difference in volume until after the breakout occurs.
b. a gradual decline in volume until the breakout.
The objective of Dow Theory is to determine
a. the timing of market bottoms.
b. changes in market psychology.
c. the likelihood of volume reversals.
d. the primary direction of the stock market.
d. the primary direction of the stock market.
The concept of Relative Strength (RS) measures the relationship between
a. two securities.
b. volume changes and price changes.
c. buying pressure and selling pressure.
d. a stock’s own price movement during the past 14 periods.
a. two securities.