WorksheetsFIN555 - Chapter 1
Total questions: 15
Worksheet time: 15mins
What is the main purpose of technical analysis?
Analyzing company financial statements
Understanding market psychology
Identifying trend changes at an early stage
Predicting the future price of a stock
What time frames can technical analysis be applied to?
Yearly and quarterly charts only
Intraday chart to weekly and monthly charts
Weekly and monthly charts only
Hourly and daily charts only
What are the three important trends in technical analysis?
Major, Minor, Micro
Primary, Intermediate, Short term
Primary, Secondary, Tertiary
Long term, Medium term, Short term
According to the major technical principle, what makes it easier to identify a trend?
Higher trading volume
Shorter time span
Random price movements
Longer time span
What is the Market Cycle Model concerned with for long-term investors?
Smaller price movements
Direction of the primary trend
Instant reaction to news events
Intraday chart analysis
What do extremely short-term price movements in intraday charts indicate?
Psychology and news event influence
Long-term price reversal
Trend continuation
Random market behavior
What is the very long-term trend (constructed from several primary trends) also known as?
Short cycle
Micro cycle
Intraday
Super cycle
What is the purpose of Peak-and-Trough Progression in technical analysis?
Determining trend reversals
Identifying market cycles
Predicting future price movements
Analyzing company fundamentals
What does a series of peaks and troughs interrupted indicate?
Price stability
Market consolidation
Trend continuation
Trend reversal
What is the significance of point D in the Peak-and-Trough Progression?
Indicates a bullish trend
Confirms a trend reversal
Predicts a market crash
Signals a buying opportunity
What are two dilemmas of using a Peak-Trough Progression technique?
False signals, Missing trend reversals
Difficulty in identifying peaks, Misinterpreting troughs
Ignoring fundamental analysis, Overlooking short-term trends
Over-reliance on historical data, Ignoring market psychology
What are two criticisms of technical analysis?
Lack of historical data, Emotional bias
Subjective nature, Overemphasis on trends
Ineffective in volatile markets, Ignoring fundamental analysis
Random price movements, Inability to predict future prices
What is the main focus of intraday chart analysis in technical analysis?
Market psychology
Long-term price reversal
Trend continuation
Random market behavior
Point A is also known as
peak
trough
high
low
Point B is also known as
peak
trough
high
low
