Question on Theory and Practical Charts

1 / 25

What causes fluctuations in the purchasing power of currency?

Inflation

Compound interest

Asset allocation

Diversification

2 / 25

A ________ occurs after an upward breakout when prices retreat to the breakout point or chart pattern boundary within 30 days.

A throwback

A relief rally

A pullback

A dead cat bounce

3 / 25

Identify the statement that inaccurately describes call and put options

Exercising an option initiates a transaction between an investor and the company that issued the stock

A put option grants the owner the right to sell stock shares at a specified price

Call and put options are speculative bets on the future movement of a stock

A call option gives the holder the right to buy a predetermined quantity of shares of a stock at a specified price

4 / 25

__________ influences the quantity of funds accessible to the economy and their associated costs.

Monetary policy

Credit policy

Economic policy

Investment policy

5 / 25

Breakouts in charts from support or resistance levels, patterns, or bands

More frequently, they experience a reversal and prove unsuccessful.

Usually signal a trend change.

Will retest the prior boundary approximately 75% of the time.

Are highly profitable signals.

6 / 25

Volume divergences arise when

A new high in an uptrend occurs with decreasing volume

Volume decreases in a sideways congestion pattern

Declining volume within a sideways congestion pattern

Volume increases as open interest decreases

7 / 25

During a double bottom pattern, volume is typically observed

Higher on the left bottom than on the right

Declining throughout the pattern

Lower on the left bottom than on the right

Consistently increasing throughout the pattern

8 / 25

which of the following pair signals the end of a bear market.

Utility stocks surge higher and interest rate start rising.

Trading volume is very low and comodity prices have declined badly.

Utility stocks drop preciptously and trading volume is very high.

Small cap stocks surge higher and the VIX rises above 20.

9 / 25

A critical pitfall to steer clear of in price analysis that can lead to financial paralysis is

To see price patterns where non trade is exist and using so many indicator.

To find pattern that are not results of indictor but due to holding loss making position.

To find patterns that are a results of human behavior, emotion and greed.

To put less weight on recent history than what is stastically suitable.

10 / 25

Bullish divergence occurs when prices reach _____ to a new _____low, but RSI registers a lower_____ compared to its prior movement

Fall, Low, Higher Bottom

Fall, Low, Lower Top

Rally, Peak, Lower Top

Rally, Peak, Higher Bottom

11 / 25

The maximum strength of the bears is illustrated by

Highest point of the bar

Opening of bullish bar

Low of the bar

Close of the bearish bar

12 / 25

The Average True Range (ATR) is an indicator designed to gauge the market's volatility :

Volatility

Breadth

Volume

Momentum

13 / 25

A descending triangle has which of the following line

A horizontal support line

A horizontal resistance line

Sloping support and resistance lines

A sloping support line

14 / 25

High volume in a stock validates _______, while extraordinary surges in volume indicate _______

Breakouts/false breakots

Oversold indicators/overbought confirmation

Trend change/exhaustion

New price direction/reversal

15 / 25

When a majority of investors have the same view of the market

The market anticipates a reversal that goes against the prevailing majority opinion.

It is reasonable to infer that the market could continue trending towards higher levels.

Market sentiment are positive.

It is reasonable to assume that the likelihood of a trend reversal is low.

16 / 25

When a Seasonality cycle occurs

Monthly

Yearly

Half-yearly

Quarterly

17 / 25

How to draw an upward trend line

A descending slope formed by connecting two or more low points

A rising slope created by linking two or more high points

A descending slope created by connecting two or more high points

An upward slope created by connecting two or more low points

18 / 25

A contraction of Bollinger Bands typically suggests that

A stock’s volatility has decrease

A stock is ready for a decline soon

A stock’s volatility has increased over a period of time

A stock is ready for a rally soon

19 / 25

Typically, a breakaway gap occurs when

Indicates a significant divergence signal.

Takes place during the accumulation phase of the market cycle.

Occurs at the end of an important price move.

Signals the beginning of a new trend.

20 / 25

The moving averages that drop off an old data point with a new one as it is added are called ?

Exponential Moving Average

Weighted Moving Average

Triangular Moving Average

Simple Moving Average

21 / 25

Most breakouts are deceptive and do not successfully indicate a new direction because

Market moves sideways about 80% of the time.

Market moves sideways about 60% of the time.

Market moves sideways about 40% of the time.

Market moves sideways about 1000% of the time.

22 / 25

What will happen near the end of a recession

Commodities turn before the bonds and stocks.

Stock turn up before the bonds and commodities

Bonds turn up before the stocks and commodities

All the asset classes turn up simultaneously.

23 / 25

A candlestick with a long upper shadow that emerges after a prolonged uptrend indicates

Buyers have lost momentum.

Sellers have lost momentum.

Both buyers and sellers have lose momentum.

The absence of clear dominance from either buyers or sellers.

24 / 25

A gap up followed by a long upper shadow on a candle chart may indicate

A bullish reversal signal

A pullback

Equilibrium

A bearish reversal signal

25 / 25

Utilizing _____ as a risk measure entails estimating potential price fluctuations in both directions

Implied Volatility

Plurality Index

Put/call parity

Standard Deviation

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