Testing for Lesson 3: Relative Strength.

1-5)Each stock will have which of the following charts associated with it:

1. Price Chart Yes No
2. Relative Strength Chart vs. Market Yes No
3. Relative Strength Chart vs. Bonds Yes No
4. Relative Strength Chart vs. Commodities Yes No
5. Relative Strength Chart vs. Peer Group Yes No

Answer True or False to each of the following statements about relative strength.
6. Mutual funds do not have peer relative strength charts. True False
7. Peer Relative Strength strives to determine how a stock is performing versus others in its group. True False
8. Relative Strength charts are designed to be short term in nature. True False
9. In Sector Relative Strength charts, the column is the most important. True False
10. In ETF Relative Strength charts, the column is the most important. True False
11. Relative Strength charts tell us whether the stock price will move higher or lower. True False
12. Relative Strength charts are updated daily. True False
13.A market relative strength chart tells us how the S&P Equal Weighted index is performing versus the security in question. True False

14. Peer Relative Strength is determined by dividing which of the following indices?
DWA Sector Closest Exchange Traded Fund S&P 500 Equal Weighted Index

15 -18. Order the following relative strength conditions from Strongest to Weakest. Enter 1 for the strongest to 4 for the weakest.
Sell Signal and Column of X's
Buy Signal and Column of X's
Buy Signal and Column of O's
Sell Signal and Column of O's

19 - 22. Match the appropriate strategy/comment with the most suitable relative strength situation.

Strategy 1 = Sector Relative Strength Chart reverses to X's
Strategy 2 = Stock gives a Peer Relative Strength Sell Signal
Strategy 3 = Fixed Income funds are giving relative strength buy signals
Strategy 4 = Trend is positive but market RS chart reverses to O's

Move some assets from equities to fixed income
Expect a breather in an otherwise overall uptrend.
Sell stock and consider others in the group.
Add exposure to the sector or overweight the sector in the portfolio.



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