- CFA Exams
- CFA Level I Exam
- Study Session 19. Portfolio Management (2)
- Reading 56. Technical Analysis
- Subject 5. Technical Indicators
CFA Practice Question
Based on traditional measures, a security is overbought if ______
A. its stochastic oscillator is 85.
B. its RSI is 25.
C. its momentum oscillator is 90.
Explanation: The stochastic oscillator measures the level of the close relative to the high-low range over a given period of time. Traditional settings use 80 as the overbought threshold.
User Contributed Comments 2
| User | Comment |
|---|---|
| Mariana80 | I don't understand why the momentum oscillator option isn't correct. I thought for the momentum oscillator anything +50 means it's overbought. |
| Marinov | Mariana80: The momentum oscillator varies around 0 or around 100 depending on the formula used. +50 is not a result you stumble upon often with the momentum oscillator. |