Technical Analysis

Parvesh Aghi
1

»Technical analysts believe that if a price

series penetrates its moving average from
above, it is a bearish signal.
a) True
b) False

2
1

»Technical analysts believe that if a price

series penetrates its moving average from
above, it is a bearish signal.
a) True
b) False

3
2

»Most technical analysts view a falling

advance-decline line in a rising market as
bearish.
a) True
b) False

4
2

»Most technical analysts view a falling

advance-decline line in a rising market as
bearish.
a) True
b) False

5
3

»Technical analysts typically interpret an

increase in the put/call ratio as a bullish
signal.
a) True
b) False

6
3

»Technical analysts typically interpret an

increase in the put/call ratio as a bullish
signal.
a) True
b) False

7
4

»Investors using technical analysis make

decisions based on economic factors such as
P/E ratios and the growth rate of dividends
a) True
b) False

8
4

»Investors using technical analysis make

decisions based on economic factors such as
P/E ratios and the growth rate of dividends
a) True
b) False

9
5

»Support is the upper bound on prices due to

the quantity of willing sellers at that price
level
a) True
b) False

10
5

»Support is the upper bound on prices due to

the quantity of willing sellers at that price
level
a) True
b) False

11
6

»Which of the following would a technical analyst

use to determine whether a security is a good
investment?
»A. the price earnings ratio
»B. balance sheets
»C. income statements
»D. trend lines

12
6

»Which of the following would a technical analyst

use to determine whether a security is a good
investment?
»A. the price earnings ratio
»B. balance sheets
»C. income statements
»D. trend lines
»Answer: D. trend lines
»
13
7

»Technical analysis focuses on two aspects of

securities to evaluate them. What are the two
aspects?
a) The price of the security (movement) and how
much (volume).
b) The size of the security.
c) Time of the day and time of the year.
d) How much and what currency.

14
7

»Technical analysis focuses on two aspects of

securities to evaluate them. What are the two
aspects?
a) The price of the security (movement) and
how much (volume).
b) The size of the security.
c) Time of the day and time of the year.
d) How much and what currency.

15
8

»Line charts are formed by connecting the

____________of each time frame.
a) Average closing price
b) Average traded price
c) Closing price
d) Open price

16
8

»Line charts are formed by connecting the

____________of each time frame.
a) Average closing price
b) Average traded price
c) Closing price
d) Open price

17
9

» In Bar char left tick indicate___ price, right tick

indicate___ price
a) Open-close
b) High-low
c) Close-open
d) 52-high-52-low

18
9

» In Bar char left tick indicate___ price, right tick

indicate___ price
a) Open-close
b) High-low
c) Close-open
d) 52-high-52-low

19
10

» if the price touch below support line

means______?
a) Stock moves bullish trend
b) The required moment is started
c) Enter in bearish it is indicator for increase in
supply
d) Time to invest this type of stocks.

20
10

» if the price touch below support line

means______?
a) Stock moves bullish trend
b) The required moment is started
c) Enter in bearish it is indicator for increase in
supply
d) Time to invest this type of stocks.

21
11

»A technician will refer to periods of accumulation

as evidence of an upcoming
a) rise in prices
b) fall in prices
c) range-bound prices
d) none of the above

22
11

»A technician will refer to periods of accumulation

as evidence of an upcoming
a) rise in prices
b) fall in prices
c) range-bound prices
d) none of the above

23
12

»Which of the following statements is true about

price?
a) Price movements succeed fundamental
developments
b) Price movements are totally random
c) Price discounts everything
d) Price never move in trend

24
12

»Which of the following statements is true about

price?
a) Price movements succeed fundamental
developments
b) Price movements are totally random
c) Price discounts everything
d) Price never move in trend

25
13

» _________ movements are typically referred to

as bull and bear markets.
a) Secondary
b) Daily
c) Major
d) Primary

26
13

» _________ movements are typically referred to

as bull and bear markets.
a) Secondary
b) Daily
c) Major
d) Primary

27
14

»Which of the following best reveal psychology of

the market at a certain point in time?
a) Line Chart
b) Candlestick char
c) Bar Char
d) None of the above

28
14

»Which of the following best reveal psychology of

the market at a certain point in time?
a) Line Chart
b) Candlestick char
c) Bar Char
d) None of the above

29
15
» A basic assumption of technical analysis in contrast to
fundamental analysis is that:
a) security prices move in patterns, which repeat over long
periods
b) a stock's price will approach its intrinsic value over time
c) financial statements provide information crucial in valuing a
stock
d) the stock market is inefficient
e) a technical analyst would evaluate the amount of short
selling, the volume of trading, and the P/E ratio of a stock

30
15
» A basic assumption of technical analysis in contrast to
fundamental analysis is that:
a) security prices move in patterns, which repeat over long
periods
b) a stock's price will approach its intrinsic value over time
c) financial statements provide information crucial in valuing a
stock
d) the stock market is inefficient
e) a technical analyst would evaluate the amount of short
selling, the volume of trading, and the P/E ratio of a stock

31
16

»A resistance level is the price range at which

technical analysts would expect the:
a) demand of a stock to decrease substantially
b) demand of a stock to increase substantially
c) supply of a stock to increase substantially
d) supply of a stock to decrease substantially

32
16

»A resistance level is the price range at which

technical analysts would expect the:
a) demand of a stock to decrease substantially
b) demand of a stock to increase substantially
c) supply of a stock to increase substantially
d) supply of a stock to decrease substantially

33
17

34
17

»Answer =C
35
18

36
19

»Which of the following terms represents an

upper price limit for a stock, based on the
quantity of willing sellers?
a) Channel
b) Trendline
c) Support
d) Resistance

37
19

»Which of the following terms represents an

upper price limit for a stock, based on the
quantity of willing sellers?
a) Channel
b) Trendline
c) Support
d) Resistance

38
20

»Which of the following do technical analysts

believe is a lower bound on a stock’s price?
a) Channel
b) Trendline
c) Support
d) Resistance

39
20

»Which of the following do technical analysts

believe is a lower bound on a stock’s price?
a) Channel
b) Trendline
c) Support
d) Resistance

40
21

»Which of the following is a breadth indicator?

a) Advance – decline line
b) Odd lot trading
c) Put /call ratio
d) Channel

41
21

»Which of the following is a breadth indicator?

a) Advance – decline line
b) Odd lot trading
c) Put /call ratio
d) Channel

42
22

»Which of the following contains the real

body?
a) Candlestick chart
b) Point-and-figure chart
c) Bar chart.
d) Moving average chart.

43
22

»Which of the following contains the real

body?
a) Candlestick chart
b) Point-and-figure chart
c) Bar chart.
d) Moving average chart.

44
23

»One of the most popular tools used by

technical analysts is:
a) moving averages.
b) P/E ratio
c) book-to-market-value ratio
d) growth rate of dividends

45
23

»One of the most popular tools used by

technical analysts is:
a) moving averages.
b) P/E ratio
c) book-to-market-value ratio
d) growth rate of dividends

46
24

»According to the Dow Theory, daily

fluctuations and secondary movements in the
stock market are used to identify the:
a) primary trend.
b) Seasonal pattern
c) Intermediate trend
d) Short term trend
e) Moving average

47
24

»According to the Dow Theory, daily

fluctuations and secondary movements in the
stock market are used to identify the:
a) primary trend.
b) Seasonal pattern
c) Intermediate trend
d) Short term trend
e) Moving average

48
25

»Which of the following indicates a sell signal

to technical analysts?
a) The amount of short selling done by specialists
is high.
b) The resistance level is broken.
c) the advance-decline line is rising in a falling
market.
d) The majority of stock market newsletters are
bearish
e) Both the second and fourth answers.
49
25

»Which of the following indicates a sell signal

to technical analysts?
a) The amount of short selling done by specialists
is high.
b) The resistance level is broken.
c) the advance-decline line is rising in a falling
market.
d) The majority of stock market newsletters are
bearish
e) Both the second and fourth answers.
50
26

»Which of the following is not part of technical

analysis?
a) P/E ratio.
b) Trendline
c) Put /call ratio
d) Channels
e) Support levels

51
26

»Which of the following is not part of technical

analysis?
a) P/E ratio.
b) Trendline
c) Put /call ratio
d) Channels
e) Support levels

52
27

»Which of the following is not a basic tenet of

the Dow Theory?

53
27

»Which of the following is not a basic tenet of

the Dow Theory?
»A bear market is established when the Dow
Jones Industrial Average is moving down.

54
28

»Which of the following indicates a buy signal

to technical analysts?
a) The stock breaks through the moving average line
from below.
b) The support level is broken.
c) Odd-lot buying exceeds odd-lot selling.
d) Both the Dow Jones Industrial Average and the Dow
Jones Transportation Average are moving down
e) the advance-decline line is falling in a rising market.

55
28

»Which of the following indicates a buy signal

to technical analysts?
a) The stock breaks through the moving average line
from below.
b) The support level is broken.
c) Odd-lot buying exceeds odd-lot selling.
d) Both the Dow Jones Industrial Average and the Dow
Jones Transportation Average are moving down
e) the advance-decline line is falling in a rising market.

56
29

»Technical analysis can help investors anticipate

what is “likely” to happen to ________ over time.
» a) prices
»b) volumes
»c) economy
»d) fair value of stock

57
29

»Technical analysis can help investors anticipate

what is “likely” to happen to ________ over time.
» a) prices
»b) volumes
»c) economy
»d) fair value of stock

58
30

»Trending Markets need the use of trend

following indicators , such
a) moving averages , MACD etc
b) Stochastic
c) Relative strength indicators
d) None of the above

59
30

»Trending Markets need the use of trend

following indicators , such
a) moving averages , MACD etc
b) Stochastic
c) Relative strength indicators
d) None of the above

60
31

»An downtrend is indicated by higher highs

and higher lows
»(A) True
»(B) False

61
32

»If volume is starting to decrease in an

uptrend, it is usually a sign that the upward
run is about to end.
»(A) False
»(B) True

62
33

»Range bound markets need the use of

following indicators , such
a) Moving averages , MACD etc
b) Stochastic , oscillators etc
c) Trend line
d) Support and resistance

63
34

»Resistance is defined as : The price level of a

particular Instrument where there is not
enough demand should price reach that level
to keep prices ..... ......Further
a) Rising
b) Falling
c) None of the above

64
35

»The daily high price is represented on a

candlestick chart by the
»( A) real body
»( B) Wicks
»(C) Channel
»(D) Arrow

65
»On which of the following does a hammer
sometimes appear?
»( A) candlestick chart
»( B) Moving average chart
»(C) Bar chart
»(D) point-and figure chart
»

66
36

»Whether market is in the trending or trading

phase is determined by
»(A) MACD
»(B) RSI
»(C) Moving averages
»(D ) ADX
»

67
37

»Range bound markets need the use of

following indicators , such
a. Moving averages , MACD etc
b. Stochastic , oscillators etc
c. Trend line
d. Support and resistance

68
38

»Divergence is when the price of an asset is

moving in the opposite direction of a technical
indicator
a) True
b) False

69
39

»(1) Which indicator should be used in trending

markets.
»(A) MACD
»(B) RSI
»(C) Moving averages
»(D) ADX

70
40

»Whether market is in the trending or trading

phase is determined by
»(A) MACD
»(B) RSI
»(C) Moving averages
»(D ) ADX

71
41

»A unique feature of the head & shoulders pattern

for many traders is that it can be used to estimate
a price target after the pattern is complete and
the neckline is broken. The formula for price
target is
a) Neckline + (Neckline - Head)
b) Head + (Neckline – Head)
c) Neckline – ( Head- Neckline )
d) Neckline + ( Head – Shoulder)

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». To find the estimated distance of the
subsequent price move after the neckline is
broken, go back and measure the vertical
distance from the peak of the head to the
neckline. Then subtract this same distance down
from the neckline beginning at the point where
price first penetrates the neckline after the
completion of the right shoulder. This gives the
minimum objective of how far prices may decline
after the completion of this top formation.

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