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Test Your Knowledge

 
1. Which of these chart patterns is not regarded as reliable for finding promising stocks?
  A) Flat base.  
  B) Saucer with handle.  
  C) Ascending triangle.  
  D) Ascending base.  
 
2. Examine the following cup with handle daily chart pattern and select the correct pivot (buy) point:
   
  A) Point A.  
  B) Point B.  
  C) Point C.  
  D) Point D.  
 
3. The typical cup with handle pattern begins with a U-shaped formation in which the stock usually drops between ____ from its peak:
  A) 50% to 60%.  
  B) 20% to 30%.  
  C) 20% to 30%, or up to 50% during a bear (down) market.  
  D) 12% to 20%, or up to 30% during a bear market.  
 
4. The flat base reflects a situation in which:
  A) A stock has run out of steam and is likely headed lower  
  B) A stock has reached a third- or fourth-stage base.  
  C) Investors are waiting for earnings news about the company before trading the stock.  
  D) Some investors grow tired of waiting for the stock to resume its climb, setting the stage for a new wave of buying.  
 
5. In a properly formed double bottom chart pattern:
  A) The second decline should normally go slightly lower than the first.  
  B) The middle point of the "W" should go at least as high as the previous all-time price high.  
  C) There is always a "handle" portion.  
  D) The correct buy point is when the stock begins its second recovery phase.  
   
   
Score =
 
Correct answers:
 
Proceed To The Next Lesson»
 
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