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NEW QUESTION 122
Based on the chart below, interpret the on balance volume (OBV) indicator with respect to price action:
- A. Prices are consolidating but OBV direction has turned higher which indicates accumulation by long term traders.
- B. Negative divergence between price and indicator suggest distribution is taking place at top.
- C. Prices are higher but OBV is sideways which can't be interpreted.
- D. Positive divergence between price and indicator suggest uptrend is weak and near reversal.
Answer: B
NEW QUESTION 123
Which of the following is a CORRECT inter-market relationship
- A. Financial stocks trend inversely to bonds
- B. Bond prices move inversely to equities
- C. Bonds prices trend in the same direction as commodities
- D. The U.S. dollar moves inversely to commodities
Answer: D
NEW QUESTION 124
A correlation coefficient of 0.75 between two variables suggests ______ relationship:
- A. extremely strong
- B. low
- C. strong
- D. non-existent
Answer: C
NEW QUESTION 125
Which of the following points represents a valid island reversal in the chart below?
- A. None of the above
- B. A
- C. C
- D. B
Answer: A
NEW QUESTION 126
Most of these indicators measure what uninformed investors are doing.
- A. Cycle indicators
- B. Sentiment indicators
- C. Flow of Funds indicators
- D. Breadth indicators
Answer: B
NEW QUESTION 127
When analyzing price action and volume, low activity (or a drop in volume) is normally associated with:
- A. a strengthening price trend.
- B. a weak price trend.
- C. lack of conviction on the part of traders.
- D. greater fluctuations in price.
Answer: C
NEW QUESTION 128
What two characteristics MUST a cycle possess in order for it to be traded rationally:
- A. There must be a reason for its existence and it must have regular intervals between peaks
- B. There must be confidence that the cycle will continue and it must be synchronized with another cycle
- C. There must be a reason for its existence and confidence that it will continue
- D. There must be a way to forecast it and it must be synchronized with another cycle
Answer: C
NEW QUESTION 129
Which of the following is a CORRECT usage of an oscillator constructed using two moving averages?
- A. To help identify long-term variations from the short-term trend
- B. All of the above
- C. To spot confirmations between technical indicators
- D. To pinpoint the crossing of two moving averages
Answer: D
NEW QUESTION 130
Which of the following is an important point in interpreting chart patterns?
- A. Chart pattern interpretation is based solely on the current pattern and ignores the prior trend
- B. Longer-term patterns are more valid than shorter patterns
- C. Chart patterns should be interpreted separately from trendline analysis
- D. Topping patterns usually have smaller price ranges and take longer to build
Answer: B
NEW QUESTION 131
An analyst has several groups of clients who are categorized according to their specific needs. Compared to research reports distributed to all of the clients, reports for a specific group:
- A. may generally exclude more basic facts.
- B. will definitely include more basic facts.
- C. cannot be selectively distributed.
- D. will not be allowed because it violates the Standard III(B), Fair Dealing.
Answer: A
NEW QUESTION 132
Which of the following point and figure trading techniques limits risk compared to more basic trading rules?
- A. Close out your trade on the second reversal back in the direction of the original signal
- B. Take small consistent profits, but allow large, windfall profitable positions to run
- C. Buy or sell as soon as a new column is created on the chart
- D. Buy or sell on pullbacks after initial trade signal
Answer: D
NEW QUESTION 133
Which of the following is one of the disadvantages of computerized trading systems?
- A. Computerized systems miss many market trends
- B. Trading decisions are less consistent
- C. Most computerized systems are unprofitable in non-trending markets
- D. Profit trades are exited too early
Answer: C
NEW QUESTION 134
When analyzing macro trends, which of the following indicators can provide an insight into the intensity of bullish or bearish camps?
- A. Accumulation/Distribution
- B. On-balance volume
- C. New High/New Low index
- D. Slope of the 200 day moving average
Answer: C
NEW QUESTION 135
Which of the following method is used to plot sequential trading data? Choose the best possible answer.
- A. Line charts
- B. Bar charts
- C. Japanese candlestick charts
- D. Point-and-figure charts
Answer: D
NEW QUESTION 136
Which of the following would provide the least help to a trader who is trying to determine where to place a stop order?
- A. Pivot Point Technique
- B. ATR
- C. Parabolic SAR
- D. TRIN
Answer: D
NEW QUESTION 137
Which of the following would NOT be true in designing a trading system utilizing bands?
- A. Close out longs when prices reverse and go below the center of the band
- B. Buy when prices penetrate the upper band
- C. Close out shorts when prices reverse and go below the center of the band
- D. Sell when price breaks below the lower band
Answer: C
NEW QUESTION 138
In a meeting with his firm's senior research analyst, George Powel, a proponent of the CFA Institute Research Objectivity Standards (ROS), stated that the key objective of the ROS is to create voluntary reporting of research practices that promote independent and objective research to CFA Institute on an annual basis. With regard to his statements about the objectives of the ROS.
- A. He is correct about the independent and objective research aspect.
- B. he is incorrect.
- C. He is correct about the voluntary reporting aspect.
- D. he is correct.
Answer: B
NEW QUESTION 139
The "Rising 3 Methods" candlestick pattern is:
I. Bullish
II. Bearish
III. Long White Body followed by a series of smaller falling candles
IV. Long Black Body followed by a series of smaller rising candles
- A. II & IV
- B. I & IV
- C. II & III
- D. I & III
Answer: D
NEW QUESTION 140
The stochastic oscillator was created utilizing which basic observation?
- A. Existing oscillators were limited to a range of 0 to 100
- B. Changes in volume precedes price movements
- C. As prices decline, the trading range tends to narrow
- D. As prices increase, prices tend to be closer to the upper end of the trading range
Answer: D
NEW QUESTION 141
What method could one utilize to analyze the long-term trends of futures prices, despite the fact that each contract is ONLY traded for several months?
- A. Equivolume charts
- B. Continuation charts
- C. Candlestick charts
- D. Point and figure charts
Answer: B
NEW QUESTION 142
Which of the following places the cycles in time length order?
- A. Kondratieff, presidential, alpha/beta, seasonal and lunar
- B. Lunar, presidential, seasonal, alpha/beta and Kondratieff
- C. Alpha/beta, lunar, seasonal, presidential and Kondratieff
- D. Alpha/beta, presidential, seasonal, lunar, and Kondratieff
Answer: C
NEW QUESTION 143
Which is NOT true of the three advancing white soldiers' pattern?
- A. It is a gradual and steady rise
- B. It is composed of three white candles with successively higher closes
- C. Each candle should have a long upper shadow
- D. Each real body opens within or near the prior session's real body
Answer: C
NEW QUESTION 144
Which of the following is considered a continuation pattern?
- A. Triangle
- B. Double top
- C. Inverse head and shoulders
- D. Head and shoulders
Answer: A
NEW QUESTION 145
Paul Jones is a chemical industry research analyst for a large brokerage company. That industry is currently seeing an increase in mergers and acquisitions. While flying through Chicago, Jones sees several senior officers who she knows are from the largest and fourth largest chemical companies walk into a conference room. She concludes that negotiations for an acquisition might be taking place. Jones:
- A. may not act but advise others to act on this information.
- B. may not act or cause others to act on this information.
- C. should inform her compliance officer that she has material nonpublic information on firms she covers.
- D. may use this information to support an investment recommendation.
Answer: D
NEW QUESTION 146
Which of the following is considered a reversal pattern in candlestick charting?
- A. Windows
- B. Hanging man
- C. Falling three methods
- D. Rising three methods
Answer: B
NEW QUESTION 147
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