9
SMALLER PRICE PATTERNS AND GAPS
Answers
1. C. This is because it is a period of controlled profit- or loss-taking. Anything longer than 3 to 4 weeks is usually indicative of something else.
2. A. One line slopes up, the other down.
3. B. Ideally, a flag should be formed when the trend of volume is noticeably declining and shrinks to almost nothing, thereby indicating a fine balance between buyers and sellers. That’s not true in this case, though volume certainly expands on the downside break.
4. D. These trendlines are diverging and do not correspond with any of the patterns described in Chapter 9. If anything, this is a small broadening formation.
5. D. C is very close to a pennant, but a pennant consists of two converging lines that slope ...
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