Deck 9: Technical Analysis

Question 1

The three principal charts used by the technical analyst are the line, bar, and _____ .

A) pie
B) XY
C) point and figure
D) logarithmic

Answer 1

point and figure

Question 2

Which chart shows the high, low, and closing price of a security on a periodic basis?

A) line
B) pie
C) point and figure
D) bar

Answer 2

bar

Question 3

The chart that plots only "significant"price movements is the _____ chart.

A) line
B) pie
C) point and figure
D) bar

Answer 3

point and figure

Question 4

A region of a chart where a great many data points appear is a

A) congestion area.
B) support area.
C) breakout.
D) resistance level.

Question 5

Statistics that are alleged to have a relationship with the future direction of the market are known as

A) economic indicators.
B) Fibonacci numbers.
C) leading indicators.
D) technical indicators.

Question 6

The quantity of shares sold short is called the

A) Fibonacci number.
B) shares outstanding.
C) short interest.
D) short interest ratio.

Question 7

Increased margin buying has historically been associated with _____ markets.

A) bearish
B) declining
C) flat
D) rising

Question 8

Suppose the mutual fund industry is currently holding 15% cash. This is _____ a signal for the future, according to the technical analyst.

A) bearish
B) bullish
C) neutral
D) stable

Question 9

A(n) _____ is a graphical representation of the net advances of a market over time.

A) bar chart
B) advance/decline line
C) growth rate
D) moving average

Question 10

Indicators such as the Super Bowl, hemline, and sunspot are known as _____ indicators.

A) contrary opinion
B) witchcraft
C) momentum
D) relative strength

Question 11

Numbers that occur frequently in nature and include the series 1, 1, 2, 3, 5, 8 are _____ numbers.

A) reproductive
B) indicative
C) Fibonacci
D) prime

Question 12

Which of the following is not one of the three components of the Dow theory?

A) primary trend
B) daily fluctuation
C) underlying trend
D) secondary trend

Question 13

Kondratev wave theory states that there is a _____ year business cycle.

A) 50 to 60
B) 75
C) 20 to 30
D) 45

Question 14

A growing field that studies instances in which apparently random behavior is, in fact, systematic is known as

A) random theory.
B) sample hypothesis.
C) chaos theory.
D) the neural cycle.

Question 15

A(n) _____ is a trading system in which a forecasting model is trained to find a desired output from past trading data.

A) algorithm
B) neural network
C) Kondratev program
D) Instinet

Question 16

Research testing a hypothesis on past data is a

A) backtest.
B) corollary.
C) trend test.
D) hindsight examination.

Question 17

An indicator based on the behavior of a well-informed group of market participants is the _____ index

A) insider trading relative strength
B) unemployment figure
C) smart money
D) warrant

Question 18

A technical indicator that prescribes actions opposing those of the marketplace is a(n) _____ indicator.

A) opposing trend
B) Keynesian
C) macroeconomic
D) contrary opinion

Question 19

Technical analysis questions which of the following levels of market efficiency?

A) weak form efficiency
B) semi-strong efficiency
C) strong-form efficiency
D) all of the above

Question 20

Compared to a line chart, a bar chart adds

A) daily price highs and lows.
B) closing prices.
C) price activity over time.
D) all of the above.

Question 21

Compared to a line chart and bar chart, a point and figure chart focuses on

A) closing prices.
B) daily price variability.
C) significant price movements.
D) all of the above.

Question 22

A candlestick chart is a bar chart plus

A) the closing price.
B) the daily price range.
C) the high/low price.
D) there is no "plus," for the bar chart and candlestick chart are the same.

Question 23

An increasing short interest ratio on a stock (a technical indicator) forecasts _____ stock price levels because it reflects added _____ for shares.

A) higher; supply
B) lower; demand
C) higher; demand
D) lower; supply

Question 24

Increased margin buying forecasts _____ stock levels and low cash positions of mutual funds might indicate _____ stock price levels.

A) higher; higher
B) higher; lower
C) lower; lower
D) lower; higher

Question 25

The terms "bull"and "bear"are associated with which of the following associated with the Dow Theory?

A) primary trend
B) secondary trend
C) daily fluctuations
D) chaos trend

Question 26

A trading system in which a forecasting model is trained to find a desired output from past trading data is called

A) Dow Theory
B) a moving average
C) a neural network
D) chaos theory

Question 27

Which of the following is not a witchcraft indicator?

A) sunspots
B) hemline indicator
C) Super Bowl indicator
D) Fibonacci numbers

Question 28

Much of technical analysis remains a puzzle.

Question 29

Charts are more important to the fundamental analyst than they are to the technical analyst.

Question 30

The technical analyst believes charts can be used to predict changes in supply and demand.

Question 31

A point and figure chart will usually have more price entries than a line chart.

Question 32

A candlestick chart is an enhanced version of a bar chart.

Question 33

A stock that breaks through a support level gives a bullish signal.

Question 34

A technical analyst believes that high short interest is bearish.

Question 35

Increased margin buying has historically been associated with previously rising markets.

Question 36

If the mutual fund industry is relatively short of cash, this is a bearish signal.

Question 37

The maximum value of the confidence index is 2.0.

Question 38

Seven is a Fibonacci number.

Question 39

Advocates of the Dow theory believe daily fluctuations in security prices are more important than the secondary trend.

Question 40

Kondratev wave theory states that the business cycle is 35 years long.

Question 41

Chaos theory studies instances in which apparently random behavior actually shows systematic patterns.

Question 42

A chaos model must be trained, while a neural network is a mathematical theorem.

Question 43

The "bull"and the "bear"are associated with Dow Theory secondary trends.

Question 44

If past cycles do repeat themselves, a large number of technical analysts will soon eliminate the repeating cycles.

Question 45

Technical analysis success depends upon stock market inefficiencies.

Question 46

Technical analysts' sources of information attempt to predict demand/supply for securities.

Question 47

An increasing advance-decline line above zero is a bull market indicator.

Question 48

A resistance level is an apparent upper level of stock prices through which investors will not invest.

Question 49

When upward price movements rise above a resistance level, the technical analysts would call it a "breakout."

Question 50

The horizontal axis on a point and figure chart is time.

Question 51

A candlestick chart is a technical indicator.

Question 52

The smart money indicator is associated with short sales of stock.

Question 53

Charting is declining in its use and usefulness due to intensive academic research.

Question 54

Chaos theory is an application of Fibonacci numbers.