Understanding Trends in Investing

What is a key characteristic of an uptrend in stock prices?

• Highs are increasing, but lows are decreasing

• Highs and lows are increasing

• Highs and lows are equal

• Highs and lows are decreasing

What might indicate that an uptrend is in trouble?

• The stock breaks above resistance

• The stock maintains equal highs and lows

• The stock produces a lower low

• The stock produces a higher high

What should an investor consider doing if a stock fails to produce a higher high?

• Ignore the warning sign

• Wait for the stock to break resistance

• Buy more shares

• Move out of the position

In a hypothetical example, what is a sign that a trend might be changing?

• The stock maintains its current trend

• The stock breaks above resistance

• The stock makes an equal low at support

• The stock makes a higher high

What action might an investor take when a stock breaks above a high, making a higher high?

• Short the stock

• Sell all shares immediately

• Wait for a retest of the old resistance as new support

• Ignore the change and hold the position