7-16 Chapter 7

True or False - A breakout occurs when a stock's price moves up quickly above a former support line?

	True
	False

True or False - Technical Analysis is for day trading?

	True
	False

What do all stock charts have in common?

	Price is on the vertical axis and time is on the horizontal axis
	Time is on the vertical axis and price is on the horizontal axis
	Price is on the vertical axis and trading volume is on the horizontal axis
	The data is always based on opening prices

What does OHLC stand for?

	Open High Liquidity Close
	Opportunity High Low Chart
	Open High Low Close
	Opportunity High Liquidity Cost

What does time horizon mean?

	The y-axis in all technical analysis charts
	The period one expects to hold an investment until they need the money back
	A retirement investment strategy
	The duration that investors are actively trading their assets

How do you recognize the Cup with Handle pattern?

	There is a deep V-shape to the cup
	The handle tends to rise abruptly
	The cup always precedes the handle
	Investors buy at the bottom of the cup formation

What does the Cup with Handle pattern show?

	A continuation of a more bearish market sentiment
	A continuation of a more bullish market sentiment
	The lowest amount a seller would be willing to take for a share of a security.
	The highest amount a buyer would be willing to pay for a share of a security.

Which of the following is not a chart style introduced in this course?

	Mountain Chart
	Renko Chart
	Volume Chart
	Candlestick Chart

What does the upright formation of the Head and Shoulders indicate?

	The Left Shoulder
	The Neckline
	Prices will rise after the formation is complete
	Prices will fall after the formation is complete

When reading a stock chart, what is plotted along the horizontal axis?

	Time
	Price
	Volume
	Investor Sentiment

True or False - Is it better to buy at the resistance level?

	True
	False

True or False - Is it better to sell at the support level?

	True
	False

A Double Bottom looks like what?

	A "W" Shape
	An "M" Shape
	Head with Shoulders pattern
	B and C

What does the logarithmic scale help show you?

	A better visual of how the price will change over the next day
	A better visual of how the price will change over the next month
	A better visual of the percentage change in trading volume
	A better visual of the percentage change in the stock price

What are Wedges and Flags in a stock chart?

	A triangular shape formed by the intersection of two trendlines
	A price below the current market price
	A technical analysis tool to measure the highs and lows of a security price relative to previous trade data
	A measure of risk versus reward

What does the upside-down formation of the Head and Shoulders indicate?

	A resistance line and support line have switched
	The change of market sentiment from bearish to bullish
	Left Shoulder, Head, Right Shoulder, Neckline
	The buyers are starting to lose power

In a Candlestick chart, which part has the most emphasis?

	High
	Open
	Close
	Low

What does a Double Top indicate?

	A new price floor
	The longer the duration of the trading range
	A market bottom
	A market top

What will a Flag on a stock chart indicate?

	Identifying a relative high or low price over a specific period
	The relative strength or weakness of a security you are considering putting into or removing from your portfolio
	After prices consolidate in a down trend, there will be a breakout point where they start to rise
	A bearish signal occurs when prices break below the lower trendline.

What does the Morning Star formation indicate?

	A bearish reversal pattern
	A bullish reversal pattern
	A bullish pattern
	A bearish pattern

What do Fibonacci ratios often display?

	The points at which a market price reverses its current position or trend
	How much a company is earning compared to the price of the stock
	It indicates that the stock hit a bottom market price
	An indication that the bulls are losing interest in the stock

What is the MACD used for?

	To have your profits and losses cancel out, a 0% return.
	To take advantage of price differences in at least two different markets
	To track the emotions of traders
	To show trends following the characteristics of this centered oscillator

What do the Bollinger Bands measure?

	The growth of the S&P 500
	Investor sentiment
	Volatility
	The rate of inflation

What is a moving average?

	A line on a chart that smoothes out the recent price history over a certain period
	A line on a chart that smoothes out the recent price history over the last month
	A line on a chart that smoothes out the price predictions over a certain period
	A line on a chart that smoothes out the price predictions over the last month

What is the Relative Strength Index (RSI) used for?

	To identifying when an asset is oversold or overbought
	It indicates the direction and strength of a price movement
	To smooth out returns so it's easier to understand when comparing alternative investments
	To determine the spread of a data set when compared to the mean value

What does it mean when the RSI rises above 50?

	The average gains are higher than average losses
	The average gains are lower than average losses
	There are a lot of sellers at this point
	Prices will retrace back down to a prior support level

What does MACD stand for?

	Market Average Connection/Deflection
	Market Average Confluence/Disparity
	Moving Average Conflict/Discrepancy
	Moving Average Convergence/Divergence

Which candle formation occurs when the open and close are at the high of the day?

	Spinning Top
	Hammer
	Dragon Doji
	Doji

What happens when a stock's price breaks through a resistance line?

	The price reaches a new low
	The price reaches a new high
	The price retraces back down
	The price retraces back up

What happens when a stock's price breaks through a support line?

	The price reaches a new low
	The price reaches a new high
	The price retraces back down
	The price retraces back up