CFA Practice Question

There are 221 practice questions for this study session.

CFA Practice Question

A stock jumps 10% in one trading day after being in a long downtrend. The volume for the day is below average. Technicians usually interpret this as a sign of a ______.
A. trend reversal
B. divergence
C. price rally
Explanation: A divergence is a contradiction between two different indicators. The simplest example of divergence is a clear upward trend on declining volume.

User Contributed Comments 1

User Comment
leftcoast hmmm...I took the below average volume to mean that the volume was less than the large volume you see near the capitulation of a downtrend.

Don't look too deeply into these things.
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