Question 1

A technician is examining a daily price and volume chart for a stock. She notes that the stock
price has risen 10 days in a row and that the volume has declined each of the last six days.
The technician will most likely conclude that the:
a) volume will soon rise due to buying pressure.
b) price rally will soon end because the price and volume are diverging.
c) price rise will continue, but at a slower rate because volume is falling.

Question 2
Which of the following statements about the different oscillators used in technical analysis
is most likely true?
a) The momentum oscillator is calculated as 100 times the difference between the last
closing price and the closing price x days ago.
b) The value of the relative strength lies between −1 and 1.
c) The stochastic oscillator is based on the assumption that in an uptrend, the stock
price tends to close near the high of its recent range.

Question 3
A technician will most likely believe that:
a) supply and demand determine stock's price.
b) technical analysis can only be applied to short time frames.
c) markets are efficient and rational in that they reflect equilibrium prices.

Question 4
From a technician's view, a stock will most likely be in a downtrend because:
a) demand is being overwhelmed by supply.
b) sellers are indicating deteriorating investor sentiment.
c) investors believe the intrinsic value of the stock is falling.

Question 5
Elliott wave theory proposed that:
a) The market moves in cycles that can be broken down into smaller and smaller
subcyles.
b) There are waves in market prices that repeat every n years, where n is a Fibonacci
number.
c) Studying moving averages in market price movements, plus bands indicating
standard deviation above and below, can be used to identify when a new wave is
starting.

Question 6
According to Elliott wave theory, wave sizes reflect the Fibonacci sequence. Which of the
following predicted wave sizes exhibit the Fibonacci wave sequence?
 a) Two-fifths the size of the impulse wave
b) Three-fifths the size of the impulse wave
c) Two-ninths the size of the impulse wave

Question 7
Which of the following statements about a head-and-shoulders pattern is most likely true?
a) An inverse head-and-shoulders pattern is preceded by a downtrend.
b) Once the neckline has been breached in the head-and shoulders pattern, the price
is expected to decline immediately by an amount equal to the distance between
the shoulder and the neckline.
c) The weaker the rally preceding the head-and-shoulders pattern, the more
pronounced the expected reversal.

Question 8
A basic chart that shows the day's opening and closing prices, as well as the day's high and
low prices is a:
a) daily bar chart.
b) line chart.
c) point and figure chart.

Question 9
A technical analyst has developed 20- and 60-day moving averages for a market index. The
60-day move average has been below the 20-day moving average for quite some time, but it
has been moving closer to the 20-day average. On the day that the analyst observes that the
20-day moving average has dropped below the 60-day moving average (i.e., the 60-day
average is now above the 20-day average), the trading strategy that the analyst is most
likely to recommend is to:
a) buy the index.
b) sell the index.
c) buy the index if the index price is above both averages.

Question 10
A technical analyst observes that a stock's price has reached a new high, but the momentum
oscillator for the stock did not reach a new high at the same time. The analyst will most
likely consider this to be a:
a) convergence representing a buy signal because the share price and oscillator will
converge as both rise.
b) divergence representing a sell signal because it is an early warning sign that the
uptrend in the share price may end soon.
c) divergence representing a buy signal because the shares have broken out and are
likely to rise until the oscillator reaches a new high.
Question 11
Which of the following would be seen as a buy signal for equities by a technical analyst
following flow-of-funds indicators?
a) A rise in the number of initial public offerings (IPOs).
b) Low mutual fund cash positions.
c) Margin debt figures that are rising above their long-term average.

Question 12
A technical analyst is using intermarket analysis, which is most likely premised on the belief
that:
a) markets are interrelated and Fibonacci numbers predict this interrelatedness.
b) markets are independent and technical tools can identify the most attractive
markets.
c) asset allocation decisions should consider the relative strength of different groups
of securities.

Question 13
A technical analyst notes that a stock has been slowly declining for several months and then
over the last week, the stock's daily prices form a pennant pattern. The analyst will most
likely expect the stock price to:
a) rise.
b) decline.
c) remain steady.

Question 14
A technician wants to graphically compare a security's gains with its losses for the last 20
trading days. He will most likely use what type of momentum oscillator?
a) Stochastic oscillator
b) Relative strength index
c) Rate of change oscillator

Question 15
A technical analyst believes that the Kondratieff Wave explains the long-term economic
cycle for the United States. A weakness to this theory is that the:
a) sample size is extremely small, which makes it nearly impossible to test the
legitimacy of the theory.
b) presidential elections, which often affect the economic cycle, occur every four years
and these can disrupt the 18-year cycle itself.
c) the theory has predicted more economic recessions than has actually occurred,
which means that its success rate is less than would be expected.
Question 16
A technical analyst uses a rate of change (ROC or momentum) oscillator as a part of her
technical analysis on a stock. The ROC oscillator has recently crossed below zero into
negative territory. At the same time, the stock generally has been in an uptrend. The analyst
will most likely consider this to be a:
a) non-signal because the stock's general trend contradicts the oscillator.
b) sell signal because the ROC oscillator is below zero and the stock will likely fall.
c) buy signal because a previous closing price for the shares was higher than the current
price and the shares will likely rise to this previous price.

Question 17
While doing a relative strength analysis:
a) The units on the vertical axis are not significant.
b) A security's price is plotted on the x-axis against the benchmark price on the y-axis.
c) The movement of a security's price graph away from the benchmark's price graph
indicates underperformance of the security.

Question 18
A double top occurs when an uptrend in prices reverses twice at approximately the same
price level. In this instance, the volume of the first top, as compared to the second top, is
usually:
a) higher.
b) the same.
c) lower.

Question 19
Technical analysis studies supply and demand in a market in an attempt to determine what
direction will continue in the future. Which of the following is not an assumption of
technical analysis?
a) History tends to repeat itself.
b) Price moves in trends.
c) The market takes into account rational behaviors only.

Question 20
The cycles of daily fluctuations for oil prices most likely exhibits which of the following?
a) Decennial patterns
b) Impulse waves
c) Kondratieff waves

Question 21
Which of the following statements regarding technical and fundamental analysis is least
accurate?
 Fundamental Analysis Technical Analysis

A Uses data which is subject to manipulation. Uses data which is more concrete and reliable.

Has been in use for a relatively longer period

Question 22
A moving averages trend line:
a) Indicates a bullish market when the short-term moving average intersects the long-
term moving average from above.
b) Showing a 20-day moving average is smoother than a 60-day moving average trend
line.
c) Would prompt an investor to buy a stock when the stock price is falling toward its
moving average.

Question 23
The moving average convergence/divergence oscillator is most likely calculated as:
a) Moving average plus specific number of standard deviations from the moving
average and minus a specific number of standard deviations from the moving
average.
b) The difference between the short-term and long-term moving averages of a
security’s price.
c) The sum of all the up changes during the period under consideration divided by the
sum of all the down changes during the period under consideration.

Question 24
Which of the following pieces of information would not be used in technical analysis?
a) Price trends.
b) Volume trends.
c) Macroeconomic trends.

Question 25
Which of the following statements regarding technical analysis is least accurate?
a) It requires an in-depth knowledge of the security being analyzed.
b) It can be used in any global freely traded market.
c) It can be performed relatively quickly.
Question 26
A technical analyst is constructing a chart. When the closing price rises, he places an X in his
chart. If the price continues to rise, the X's are stacked up. When the price falls, he starts a
new column with an O. If the price continues to fall, he places more O's below the first O.
The analyst is most likely building what type of chart?
a) Bar
b) Candlestick
c) Point and figure

Question 27
In which of the following circumstances would technical analysis most likely be useful?
a) The securities markets are highly illiquid.
b) The company has a questionable corporate governance record.
c) The stock price is not a good indicator of the supply and demand.

Question 28
Which of the following is least likely a difference between technical analysis and
fundamental analysis of securities?
a) Technical analysis does not make use of the macroeconomic data, whereas
fundamental analysis makes use of the macroeconomic data.
b) Technical analysis assumes that investors behave in an irrational manner, whereas
fundamental analysis assumes that investors behave in a rational manner.
c) The data used for technical analysis is more prone to manipulation as compared
to the data used for fundamental analysis.

Question 29
When an analyst uses a bar chart:
a) The horizontal axis represents changes in price.
b) A short bar indicates that there is little price movement over the time interval.
c) The body of the bar is colored black or is clear to indicate whether the opening
price is above or below the closing price.

Question 30
Technical analysts are least likely to believe that they have the following advantages over
fundamental analysts:
a) They do not need to use financial statements.
b) They can select the right timing for buying and selling securities.
c) Their decisions will not be affected by changes in investor sentiment.
Question 31
A stock's price pattern shows a double top reversal pattern. After peaking at a high of $60 it
fell to $55 before returning up to $59 and then declining again. The technical analyst's
target price for the stock based on this pattern will be closest to:
a) $59
b) $55
c) $51

Question 32
A stock's price pattern has taken on a head and shoulders shape. A technician is explaining
to a client where this pattern is categorized and its implication for the stock's price. The
technician will most likely state that its pattern category and implication are:
Pattern Category Stock Price Implication
A. Reversal Negative
B. Continuation Negative
C. Continuation Positive
a) Row A
b) Row B
c) Row C

Question 33
Which of the following statements about the various recurring cycles in the market is most
accurate?
a) Kondratieff Wave theory suggests that economies went through an 18-year economic
cycle.
b) The decennial pattern traces the time taken to achieve a 10% average annual stock
return.
c) According to the presidential cycle theory, the third year of a U.S. presidential term
boasts the best stock market performance out of all the four years.

Question 34
When a technical analyst identifies a head-and-shoulders pattern, it indicates that:
a) A previous uptrend is about to be reversed.
b) A previous uptrend is going to resume, particularly if accompanied by low trading
volumes.
c) A previous uptrend is going to resume, particularly if accompanied by high trading
volumes.

Question 35
After Essex Inc.'s peak of $55, it fell to $51 the week after. It then went upward to $60 only
to fall back again to $51. The week following the series of price fluctuations, Essex Inc.'s
stock reaches $56 on light volume but closes the week at $50. What would be the most
likely prediction regarding the stock of Essex Inc.?
a) Its price will decrease to $42.
b) Its price will increase to $56.
c) Its price will increase to $51.

Question 36
A technician observes that the CBOE Volatility Index (VIX) is extremely high. At the same
time, the technician notes that his other technical analysis tools indicate the market is
oversold. The technician will most likely consider this to be:
a) Bullish because the VIX, a contrarian indicator, is indicating that market participants
fear an impending market decline and the other tools indicate an oversold market.
b) Neither bullish nor bearish because the VIX is indicating that market participants fear
an impending market decline, which contradicts what the other tools are indicating.
c) Bearish because the VIX, a sentiment indicator, is indicating that market participants
fear an impending market decline and this is confirmed by the other tools indicating
an oversold market.

Question 37
When observing Stochastic oscillators, a trader will most likely sell a security when:
a) The %K line crosses %D line from below and the oscillator value is 80 or greater.
b) The %K line crosses the %D line from below and the oscillator value is 20 or less.
c) The %K line crosses %D line from above and the oscillator value is 80 or greater.

Question 38
Based on the relationships that have been observed between different asset classes,
commodity prices are most likely to rise when:
a) Stock prices rise.
b) The dollar strengthens.
c) Bond prices decline.

Question 39
A stock's price pattern shows a head and shoulders shape. The shoulders reached a high
price of $50 and a low price of $42. The head started at the left shoulder's low price of $42
and rose to a high of $60 before falling back to a low of $42, which was the beginning of the
right shoulder. The target price for the stock will be closest to:
a) $18
b) $24
c) $38

Question 40
Which of the following is least likely a sentiment indicator?
 a) Put/call ratio
b) Arms index
c) Short interest ratio

Question 41
An analyst plotted a stock’s price over time and observed a descending triangle. She should
most likely:
a) Purchase call options on the company’s stock.
b) Write put options on the company’s stock.
c) Purchase put options on the company’s stock.

Question 42
The Change of Polarity Principle asserts that:
a) Once the price reaches the resistance level, it becomes the new support level for
short position.
b) Once the price rises above the resistance level, it becomes the new resistance level.
c) Once the price rises above the resistance level, it becomes the new support level.

Question 43
A support level in technical analysis is a price at which an increase in:
a) Supply of stock will reverse a rising trend.
b) Supply of stock will reverse a declining trend.
c) Demand for a stock will reverse a declining trend.

Question 44
A high short-interest ratio most likely indicates that a security’s price:
a) Is expected to rise.
b) Is expected to decline.
c) May either rise or decline.

Question 45
With respect to the efficiency of markets, fundamental analysts tend to believe markets are:
a) efficient, but often irrational.
b) inefficient and irrational.
c) efficient and rational.

Question 46
For which of the following investment instruments can you determine an intrinsic value?
a) Currency.
b) Commodity.
 c) Futures contract.

Question 47
A support level is the lower limit to stock price fluctuations. Which of the following
statements regarding support level is true?
a) At this level, the demand for a stock increases.
b) At this level, the supply for a stock decreases.
c) At this level, the demand for a stock decreases.

Question 48
Which of the following statements regarding moving averages is least accurate?
a) They smooth out short-term price fluctuations.
b) The longer the time frame used in their creation, the more volatile the line.
c) A stock that is in an uptrend tends to trade above its moving average.

Question 49
At the support level, technicians believe that investors most likely:
a) Generate enough selling activity to prevent any further increase in price.
b) Believe that the security is an attractive investment.
c) Believe that the security is overpriced.

Question 50
An analyst plotted a security’s price over time and observed a head and shoulders pattern.
She noted the following prices from the graph:
High during head = $94
High during shoulders = $87
Neckline = $79
The security’s estimated price target is closest to:
a) $64
b) $72
c) $71

Question 51
Which of the following statements is true regarding the relative strength index?
a) It compares the closing price of a security to the range of its prices over a certain
period of time.
b) It compares the magnitude of recent gains to recent losses in an attempt to
determine overbought and oversold conditions of an asset.
c) It shows the relationship between two moving averages of prices.
Question 52
When a technical analyst notes that a stock has risen to a price range where she expects to
see major sellers of the stock enter the market, then the stock is most likely to have:
a) Broken its trend line.
b) Reached a resistance level.
c) Broken through its moving average line from below.

Question 53
What types of price patterns normally precede an inverse head-and-shoulders trading
pattern?
a) Prices go down.
b) Prices become volatile.
c) Prices go up.

Question 54
The Arms Index, a flow-of-funds indicator that is also called the TRIN Indicator, for the NYSE
rises from 0.95 on Monday to 5.25 on Tuesday. In comparison, the Arms Index for the
NASDAQ falls from 4.27 on Monday to 0.99 on Tuesday. A technical trader will most likely
conclude that the:
a) NASDAQ had a better day than the NYSE on Tuesday.
b) NYSE is more attractive than the NASDAQ because the Arms Index is much higher
for the NYSE.
c) both the NYSE and NASDAQ are seeing inflow of funds because both have Arms
Index values above zero.

Question 55
Which of the following statements about technical analysis is untrue?
a) It involves the examination of past market trends.
b) It can be performed relatively quickly, while fundamental analysis usually takes
longer.
c) Technical and fundamental analysis take about the same time.

Question 56
Technical analysis can most likely be applied to identify:
a) Short-term trends only.
b) Long-term trends only.
c) Both short-term and long-term trends.

Question 57
Price and volume data are relied on most in:
a) fundamental analysis.
 b) intermarket analysis.
c) technical analysis.

Question 58
An indicator, which consists of a moving average, plus a higher line, which represents the
moving average plus a set number of standard deviations from average price and a lower
line that is a moving average minus the same number of standard deviations, is called:
a) Bollinger Bands.
b) Elliott Wave.
c) Stochastic Oscillator.

Question 59
Which of the following is not a price-based indicator in technical analysis?
a) Moving averages.
b) Bollinger bands.
c) Kondratieff wave.

Question 60
An analyst plotted a stock’s price over time and decided to write call options on the stock.
He most likely observed a(n):
a) Double bottom pattern.
b) Ascending triangle pattern.
c) Head and shoulders pattern.

Question 61
Under the Elliott Wave Theory, the longest of the waves is called the:
a) Epic supercycle.
b) Major supercycle.
c) Grand supercycle.

Question 62
The chart that has a light or dark body depending on a stock's gain or loss for the day is a:
a) candlestick chart.
b) daily bar chart.
c) point and figure chart.

Question 63
A trader reviews the price-to-earnings and price-to-book value ratios on companies and only
buys companies where these ratios are low relative to historical levels. In making her
decisions, the trader is most likely using:
a) only technical analysis.
 b) only fundamental analysis.
c) both technical and fundamental analysis.

Question 64
A technical analyst notes that a stock appears to trade in a range between £12.00 and
£17.00. When the price drops to £12.00, buyers come into the market and the price drop
stops. The £12.00 is the:
a) support level.
b) resistance level.
c) continuation level.

Question 65
A technician observes that a stock's price pattern has taken on a head and shoulders shape.
Each shoulder reached a high price of $40 and a low price of $34. The head started at the
left shoulder's price of $34, rose to a peak of $50, and then fell back to $34, which was the
start of the right shoulder. The technician's target price for the shares will be closest to:
a) $18
b) $30
c) $52

Question 66
A technical analyst wants to quickly review the daily price moves for a stock to see if the
price rose, fell, or was unchanged. She will most likely use which type of chart if she wants
to select a chart where the price moves are the most visible?
a) Bar
b) Candlestick
c) Point and figure

Question 67
An inverse head and shoulders pattern most likely indicates that prices are expected to:
a) Decline.
b) Rise.
c) Follow the same trend that preceded the pattern.

Question 68
When the long-term moving average intersects the short-term moving average from below,
it is referred to as a:
a) Golden cross.
b) Silver cross.

Question 69
Consider the following statements:
Statement 1: In a candlestick chart, if the body of the candle is shaded, it means that the
closing price was higher than the opening price.
Statement 2: In a bar chart, a cross-hatch to the left indicates the closing price, while a
cross-hatch to the right indicates the opening price.
Which of the following is most likely?
a) Only one statement is incorrect.
b) Both statements are correct.
c) Both statements are incorrect.

Question 70
The type of analysis most likely used to analyze commodities, currencies, and futures is:
a) fundamental analysis.
b) intermarket analysis.
c) technical analysis.

Question 71
A technical analyst detects an ascending triangle pattern in the chart of a stock. How should
the analyst categorize this pattern and what is the most appropriate trade for the analyst?
a) It is a reversal pattern and the shares should be shorted.
b) It is a continuation pattern and the shares should be bought.
c) It is a continuation pattern and the shares should be shorted.

Question 72
A technical analyst is using the Elliott Wave Theory to predict the change in the overall stock
market price. Currently, the analyst believes a down wave representing a retrenchment is
about to occur. The analyst will most likely predict that the percentage decline will be equal
to:
a) a Fibonacci number, such as 13, 21, etc. expressed as a percentage.
b) the ratio of one Fibonacci number to the next Fibonacci number, such as 5/8,
8/13, etc.
c) a multiple of 1.618 (the “golden ratio”), which is the most common outcome
when a Fibonacci number is divided by its predecessor.

Question 73
When a short-term moving average crosses a long-term moving average from above this is
generally considered:
a) A bullish signal.
b) A bearish signal.
c) Either a bullish or bearish signal depending on whether volumes are rising or
falling.
Question 74
A technical analyst detects a double top formation in the chart of a stock he's been
following. The first top was at €78.10 and the second top was at €77.80. In between the two
tops, the stock price fell to €62.00. The most appropriate trade and the target price are:
a) long the stock with a €94 target price.
b) short the stock with a €54 target price.
c) short the stock with a €46 target price.

Question 75
Which of the following statements is not true?
a) In a bar chart, the long bar indicates high price volatility.
b) In a point-and-figure chart, sustained price movements are represented by long
columns of Xs and Os.
c) In a candlestick chart, the longest candlestick indicates a reverse in trend.

Question 76
If an ROC (rate of change) oscillator crosses zero into positive territory during an uptrend,
this is considered a:
a) buy signal.
b) hold signal.
c) sell signal.

Question 77
For technical analysis, which of the following is indicative of a change in polarity principle?
a) When a stock repeatedly drops to a certain price, it then starts rising back up.
b) The belief that when a stock's resistance level is breached, the resistance level then
becomes the support level.
c) When a stock's price, after having been in a long upward or downward trend, starts
moving in the opposite direction.

Question 78
Which of the following is least likely true of the moving average indicator?
a) When the short-term moving average intersects the long-term moving average from
below, the formation is referred to as a golden cross and is a bullish sign.
b) When the stock price starts falling toward its moving average, investors will sell the
stock.
c) When the short-term moving average intersects the long-term moving average from
above, it forms a dead cross, which is a bearish signal.

Question 79
Which of the following is least likely a continuation pattern?
 a) Triple top
b) Symmetrical triangle
c) Pennant

Question 80
Citi stock reported short interest of 11,506,500 shares with an average daily trading volume
of 9,807,400. The calculation of the short interest ratio is closest to:
a) 0.85 days
b) 1.00 days
c) 1.17 days

Question 81
If Ecotech stock had a double bottom and was currently trading slightly above that price,
how would a technical equity analyst likely rate Ecotech stock?
a) Buy.
b) Hold.
c) Sell.

Question 82
Which of the following statements regarding a strategy based on Bollinger bands is most
accurate?
a) A contrarian would buy a security when its price reaches the upper band, whereas a
long-term investor would only buy on a significant breakout above the upper band.
b) A contrarian would sell a security when its price reaches the upper band, whereas a
long-term investor would only sell on a significant breakout below the lower band.
c) A contrarian would sell a security when its price reaches the upper band, whereas a
long-term investor would only sell on a significant breakout above the upper band.

Question 83
When a short-term moving average crosses from below a long-term moving average, this is
called a(n):
a) dead cross.
b) golden cross.
c) iron cross.

Question 84
Which of the following is least likely a drawback of technical analysis?
a) Market movements and trends can change without warning.
b) It cannot be used in liquid markets.
c) Technical analysts might miss a change in investor psychology.
Question 85
Given the following information:
Day Closing Price
Monday 22.4
Tuesday 21.2
Wednesday 23.8
Thursday 22.4
Friday 23.2
5-day SD: 0.9
30-day SD: 1.0
Using two standard deviations, determine the five-day Bollinger bands on Friday.
a) 23.8 and 21.8
b) 24.4 and 20.8
c) 24.8 and 20.2

Question 86
Which of the following is most correct in comparing fundamental analysis to technical
analysis?
a) Fundamental analysts work with more objective data than do technical analysts.
b) Technical analysis can be considered more practical and less theoretical than
fundamental analysis.
c) Technical analysis is objective when making a decision on a stock, while
fundamental analysis is subjective because judgment is required.

Question 87
A high number of new equities are issued when prices are close to market tops. The effect
of these issuances is:
a) bullish.
b) bearish.
c) no impact.

Question 88
Which of the following statements is most likely true about Bollinger bands?
a) It consists of a moving average plus a higher line representing the moving average
plus a set number of standard deviations from average price and a lower line that
is a moving average minus the same number of standard deviations.
b) It is based on the assumption that in an uptrend, the stock price tends to close
near the high of its recent range, while in a downtrend it tends to close around its
recent low.
c) It is the difference between the short-term and long-term moving average of a
security's price.
Question 89
Which of the following patterns are indicative of the Fibonacci sequence?
a) 0, 2, 4, 6, 8, 10, 12, 14, 16, 18
b) 0, 1, 3, 6, 10, 15, 21, 28, 36, 46
c) 0, 1, 1, 2, 3, 5, 8, 13, 21, 34

Question 90
An analyst wants to construct a point and figure chart for a security and gathers the
following information:
Price on Day 1: $32
Price on Day 2: $33
Price on Day 3: $35
Price on Day 4: $32
Price on Day 5: $31.50
Price on Day 6: $30
Price on Day 7: $28
Given a box size of $1 and a reversal size of $3, the analyst will most likely:
a) Plot three Xs in the first column and seven Os in the second column.
b) Plot three Xs in the first column and three Os in the second column.
c) Plot two Xs in the first column and five Os in the second column.

Question 91
In technical analysis, the principle which states that once a support level has been breached
it becomes the resistance level is known as the:
a) change in polarity principle.
b) change in resistance principle.
c) change in support principle.

Question 92
A major weakness of technical analysis is that it:
a) is a relatively new field, with a short history—less than 100 years—of usage.
b) fails when there are deviations from intrinsic value that persist for long periods.
c) relies on trends that can suddenly change because trends are driven by investor
psychology.

Question 93
Which of the following is least likely to be a feature of Elliot wave theory?
a) Positive price movements would take prices up by a factor equal to the ratio of a
Fibonacci number to its preceding number.
b) In a bull market, the market moves up in five waves and is followed by a
downward movement in four waves.
c) It can be used in long-term economic analysis and short-term trading.
Question 94
Which of the following statements about asset allocation between different categories of
securities is most likely true?
a) Markets for different categories of securities and asset classes are independent.
b) An increase in the bond yields is a positive sign for the stock prices.
c) A decrease in the bond prices indicates a rise in the commodity prices.

Question 95
By drawing a line which connects the lows on a price chart, one is most likely depicting:
a) a downtrend.
b) an uptrend.
c) a resistance line.

Question 96
Based on the presidential cycle, the best stock market performance is most likely to occur in
the:
a) First year of the U.S. presidential term.
b) Third year of the U.S. presidential term.
c) Fourth year of the U.S. presidential term.

Question 97
Nicholas is interested in the price volatility in the DJIA in the month of February. He is least
likely to refer to:
a) Bar charts.
b) Point and figure charts.
c) Candlestick charts.

Question 98
Which of the following is least likely to be an assumption of technical analysis?
a) Market values are determined by supply and demand.
b) The prices of securities reflect all past market trading data.
c) The prices of securities move in trends that tend to repeat themselves.

Question 99
Which of the following is true of technical analysis?
a) Technical analysis is the only tool available to investors to forecast future prices of
stocks which do not have a history of paying dividends or positive earnings.
b) Technical analysis is used only by investors who have a short-term investment
horizon because it can determine only the short-term trends of securities.
c) Technical analysis has limited application in illiquid markets.
Question 100
In a typical head-and-shoulders trading pattern, what happens to prices on the right of the
head?
a) Prices go lower.
b) Prices become volatile.
c) Prices go up.