Stock Trading Stock Trading Technical Analysis & Chart Patterns

Question 1

What does a 'head and shoulders' chart pattern typically signal?

Accepted Answer

A bearish reversal

Answer

A bullish continuation

Answer

A period of consolidation

Answer

A breakout to new highs

Question 2

What does the Relative Strength Index (RSI) measure?

Accepted Answer

The speed and magnitude of price changes

Answer

Volume relative to prior trading days

Answer

The ratio of a stock's return to the market return

Answer

The number of advancing vs. declining stocks

Question 3

What is a 'support level' in technical analysis?

Accepted Answer

A price floor where buying interest tends to prevent further decline

Answer

A price ceiling where selling pressure emerges

Answer

The average price over a set time period

Answer

A government-mandated trading halt price

Question 4

What does a 'golden cross' indicate in technical analysis?

Accepted Answer

The 50-day moving average crosses above the 200-day moving average

Answer

The stock price crosses above its 52-week high

Answer

Volume crosses above its 30-day average

Answer

The RSI crosses above the 70 level

Question 5

What does high trading volume during a price breakout suggest?

Accepted Answer

The breakout has stronger conviction and is more reliable

Answer

The breakout is likely a false signal

Answer

The stock is about to reverse

Answer

Institutional selling is occurring

Question 6

What is a 'candlestick' chart?

Accepted Answer

A bar chart showing open, high, low, and close with a colored body

Answer

A chart showing only closing prices connected by a line

Answer

A chart displaying moving averages only

Answer

A chart plotting volume against price