13
MOMENTUM I: BASIC PRINCIPLES
Answers
1. A = D; B = E; C = G; D = A; E = B; F = F; G = C; H = H
2. B. It is important to await a price confirmation because you do not know if another divergence will develop.
3. A. Momentum characteristics
B. Momentum trend reversals
4. A.
5. D.
6. D.
7. B.
8. D.
9. D. This is an example of the oscillator barely rising above the equilibrium level following a negative divergence. Such action, when confirmed by the price, is usually followed by an above-average decline.
10. Breadth
11. B. Only price can signal a trend reversal. Divergences merely tell us whether the underlying momentum is getting weaker or stronger. False is, therefore, the correct answer.
12. D.
13. B. When a simultaneous break develops, the ...
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