| ? |
Answer |
Yea or
Nay |
Question: |
Correct Answer: |
| 1 |
3 |
| Match the statement with the most appropriate answer.
1
|
On each level of analysis, a stock can only be a member of one sector. For instance, each stock can only be a member of one broad economic sector, only one DWA sector, etc.
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| 2 |
5 |
| Match the statement with the most appropriate answer.
Column
|
Because sectors move slower than individual stocks, when evaluating the sector relative strength chart, we pay the most attention of the column of the chart.
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| 3 |
1 |
| Match the statement with the most appropriate answer.
2
|
Average Sectors have two of the following indicators positive - Sector Relative Strength, Percent Positive Trend, Percent RS in X's, and Percent RS Positive
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| 4 |
2 |
| Match the statement with the most appropriate answer.
True
|
When evaluating two stocks with similar individual traits (i.e. positive trend, good chart patterns, positive relative strength), stacking the odds in your favor means also choosing the stock in the sector which is Favored.
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| 5 |
6 |
| Match the statement with the most appropriate answer.
3
|
Favored Sectors have three or four of the following indicators positive - Sector Relative Strength, Percent Positive Trend, Percent RS in X's, and Percent RS Positive
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| 6 |
4 |
| Match the statement with the most appropriate answer.
False
|
Sector analysis is a very vital part of any individual stock evaluation since market and sector risk can account for 75% to 80% of the risk in any indivdual stock.
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| 7 |
C |
| Here is a chart of the Aerospace Airlines sector. At this point what would you do with the stocks in your portfolio that belong to this sector?
Buy as many good fundamental stocks as you can.
Boycott the airline industry and vow to take trains and boats for the rest of your life.
Evaluate your stocks for weak issues that may be in trouble and either sell or hedge them
Wait for a reversal up to buy more stock.
|
Evaluate your stocks for weak issues that may be in trouble and either sell or hedge. The sector bullish percent chart has reversed down into O's from a high level suggesting that the defensive team has come on the field and the field position is poor. This risk level change in the sector suggests that you evalute your holdings in the sector and those which are weak on a relative strength basis or giving sell signals should be hedged in some manner.
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| 8 |
D |
| Same sector. What would you do with stocks in this sector here?
Liquidate all issues because a sell signal is coming up
Wait for the sector to move below 30% to find the really good deals.
Still vowing never to fly again.
On the next reversal up, select strong peer relative strength stocks.
|
The sector has fallen near the oversold territory but remains on defense. The next reversal up will put the sector on offense with good field position. Especially during declines, those stocks with the strong relative strength stand out and are the ones to consider for purchase.
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| 9 |
B |
| Answer the following questions with regard to this Distribution Curve:
Looking at this Distribution Curve, the market is:
Normal
Oversold
Overbought
|
The vast majority of sectors are plotted below the 50% mark on the distribution curve so we would say that this curve is in an oversold condition.
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| 10 |
C |
| Answer the following questions with regard to this Distribution Curve:
Will this Distribution Curve move more to the right or to the left from here?
Right
Left
Can't Tell
|
We can never predict which way the market will go. What we can say is that the probabilities are the sector distribution curve will move higher from here. However, most sector bullish percent charts are still in O's so that could well mean that the curve continues to shift a little bit more to the left before it finishes its descent. We will look for more sectors to begin reversing up (moving to capital letters) as a sign the shift is taking place from supply being in control of the market to demand being in control.
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| 11 |
B |
| Answer the following questions with regard to this Distribution Curve:
The sectors in this Distribution Curve are predominantly:
In X's
In O's
|
The vast majority of sectors are still in O's on their sector bullish percent charts as denoted by the fact they are still in lower case letters.
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| 12 |
D |
| Answer the following questions with regard to this Distribution Curve:
Looking at the Drug sector (drug) on this Distribution Curve, would you consider buying stocks in this sector?
Yes, drug stocks have been slammed by the media so it has to be time to buy.
No, it isn't below 20% yet.
Yes, the sector is in X's below 30% - you can buy stocks, whether weak or strong.
Not yet, the sector is still in O's and has not reversed up yet.
I'd have to see the actual chart to see where it normally resides.
|
The Drug sector bullish percent chart is on the oversold side of the curve, residing between 22% and 26%. The bullish percent chart remains in O's at this time since the sector is in lower case letters. That would suggest that we get our shopping list of ideas together and look to buy once the sector has six percent of the stocks move from sell signals to buy signals and tell us that demand is back in control of the group. Note also that the green shading means the sector is Favored or has strong relative strength.
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| 13 |
B |
| Sector Relative Strength.
Complete the formula for the Sector RS reading by selecting the correct entry for each of the fields.
|
The Sector Price is then divided by the S&P 500 Equal Weighted Index and multiplied by 100 to get a relative strength reading which is plotted on a Point & Figure chart.
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| 14 |
C |
| Sector Relative Strength.
Complete the formula for the Sector RS reading by selecting the correct entry for each of the fields.
|
The Sector Price is then divided by the S&P 500 Equal Weighted Index and multiplied by 100 to get a relative strength reading which is plotted on a Point & Figure chart.
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| 15 |
D |
| Sector Relative Strength.
Complete the formula for the Sector RS reading by selecting the correct entry for each of the fields.
|
The Sector Price is then divided by the S&P 500 Equal Weighted Index and multiplied by 100 to get a relative strength reading which is plotted on a Point & Figure chart.
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