Chart and Candlesticks Quiz

Identify the chart pattern that indicates a potential trend reversal from bearish to bullish.

• Head and shoulders

• Double bottom

• Triple top

• Falling wedge

What is the name of the candlestick pattern that consists of a small body with long upper and lower shadows, indicating indecision in the market?

• Hanging man

• Morning star

• Bullish engulfing

• Doji

How can a technical analyst use moving averages to identify potential support and resistance levels on a chart?

• By observing when the price of the security tends to bounce off the moving average line, indicating a potential support or resistance level.

• By ignoring the moving averages and focusing only on the volume of trades

• By looking at the moving averages and drawing trendlines based on their direction

• By counting the number of moving averages intersecting on the chart

Name the chart pattern that is formed when the price movement creates a triangle shape, indicating a potential breakout in either direction.

• Ascending triangle pattern

• Descending triangle pattern

• Double top pattern

• Symmetrical triangle pattern

Explain the significance of a bullish engulfing candlestick pattern in technical analysis.

• It indicates a potential reversal of a downtrend.

• It indicates a potential reversal of an uptrend.

• It has no significance in technical analysis.

• It indicates a potential continuation of a downtrend.

In technical analysis, what does the term 'RSI' stand for and how is it used to analyze charts?

• Repetitive Signal Identifier

• Rapid Stock Increase

• Relative Strength Index

• Random Stock Indicator

What is the purpose of using Bollinger Bands in technical analysis and how are they interpreted on a chart?

• To determine the market sentiment. Interpreted by plotting the volume of trades on the chart.

• To measure volatility and identify overbought or oversold conditions. Interpreted by plotting two standard deviations above and below a moving average.

• To predict the future price of a stock. Interpreted by connecting the highest and lowest points on the chart.

• To calculate the company's earnings. Interpreted by drawing a straight line through the closing prices.

Identify the candlestick pattern that indicates a potential trend reversal from bullish to bearish.

• Doji

• Hammer

• Bearish Engulfing

• Bullish Engulfing

How can a technical analyst use volume indicators to confirm the strength of a price movement on a chart?

• By using moving averages instead of volume indicators

• By focusing only on the price movement

• By ignoring the volume of trades

• By analyzing the volume of trades accompanying the price movement

Explain the concept of 'support-turned-resistance' and 'resistance-turned-support' in the context of applying technical analysis to charts.

• Support-turned-resistance and resistance-turned-support are terms used in fundamental analysis

• Support-turned-resistance and resistance-turned-support are price levels that have changed roles, with support becoming resistance and resistance becoming support.

• Support and resistance are irrelevant in technical analysis

• Support-turned-resistance and resistance-turned-support refer to the movement of stock prices in opposite directions