Reading 12: Technical Analysis-LOS d 习题精选 likely, interpret, displays

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Session 3: Quantitative Methods: Application
Reading 12: Technical Analysis

LOS d: Identify and interpret common chart patterns.

 

 

A trend is most likely to reverse if the price chart displays a:

A) descending triangle pattern.

B) rectangle pattern.

C) head and shoulders pattern.

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Head and shoulders (and inverse head and shoulders) patterns typically indicate a reversal of a price trend. Triangle and rectangle patterns typically suggest the price trend will continue in the same direction.

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A trend is most likely to reverse if the price chart displays a:

A) descending triangle pattern.

B) rectangle pattern.

C) head and shoulders pattern.

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Head and shoulders (and inverse head and shoulders) patterns typically indicate a reversal of a price trend. Triangle and rectangle patterns typically suggest the price trend will continue in the same direction.

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An inverse head and shoulders pattern most likely indicates:

A) the reversal of a downtrend.

B) the continuation of a downtrend.

C) the reversal of an uptrend.

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Inverse head and shoulders patterns typically occur after downtrends and indicate that the trend is going to reverse.

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A head and shoulders pattern is most likely to precede a reversal in trend if:

A) the left shoulder, the head, and the right shoulder occur on increasing volume.

B) the left shoulder, the head, and the right shoulder occur on decreasing volume.

C) volume decreases between the left shoulder and the head, then increases between the head and the right shoulder.

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Decreasing volume on each of the high prices in a head and shoulders pattern (or each of the low prices in an inverse head and shoulders) suggests weakening in the supply and demand forces that were driving the price trend.

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After trending upward for several weeks, the price of Vibex, Inc. stock reaches a high of $54 before falling to $48 over the following week. The stock then rallies to $57 but then declines again to $48. The following week, the stock increases to $52 on light volume before ending the week at $46. A technical analyst observing this pattern would be most likely to predict that Vibex stock will:

A) decrease to $37.

B) increase to $50.

C) decrease to $39.

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The pattern described here is a head and shoulders top with the head at $57 and the neckline at $48. The size of the pattern is $57 ? $48 = $9. The price target for the ensuing downtrend equals the size of the head and shoulders pattern and is measured from the neckline: $48 ? $9 = $39.