CFA Practice Question

There are 221 practice questions for this study session.

CFA Practice Question

In a head and shoulders pattern: left shoulder: $25; head: $32; right shoulder: $26; neckline: $22.

What would be a technician's price target?

A. $12
B. $22
C. $22.5
Correct Answer: A

After breaking neckline support, the projected price decline is found by measuring the distance from the neckline to the top of the head. This distance is then subtracted from the neckline to reach a price target.

Price target = 22 - (32 - 22) = $12

User Contributed Comments 2

User Comment
sgossett86 lol so in otherwords it's relatively worthless
janglejuic These are basic patterns and concepts and do not always work. Market behavior also constantly changes and the different strategy must be adopted. Different stocks also have different behavior patterns. More free education on Technical Analysis can be found www.babypips.com/school

- Technical Analyst
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