FIN555 - Chapter 1

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