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Testing for Lesson 5
1) Match the statement with the most appropriate answer.
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| Two |
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| Three |
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| True |
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| False |
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2) 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.
3) 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.
4) Answer the following questions with regard to this Distribution Curve:
a. Looking at this Distribution Curve, the market is:
Normal
Oversold
Over
bought
b. Will this Distribution Curve move more to the right or to the left
from here?
Right
Left
Can't tell
c. The sectors in this Distribution Curve are predominantly:
In X's
In O's
d. 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.
Sector Relative Strength.
Complete the formula for the Sector RS reading by selecting the
correct entry for each of the fields.
( / ) ( ) = Sector RS Reading
Click for an answer sheet.
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