Portfolio Management: Technical Analysis Flashcards Preview

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Flashcards in Portfolio Management: Technical Analysis Deck (42)
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1
Q

Arms index

A

A flow of funds indicator applied to a broad stock market index to measure the relative extent to which money is moving into or out of rising and declining stocks.

2
Q

Bar chart

A

A price chart with four bits of data for each time interval—the high, low, opening, and closing prices. A vertical line connects the high and low. A cross-hatch left indicates the opening price and a cross-hatch right indicates the close.

3
Q

Bollinger Bands

A

A price-based technical analysis indicator consisting of a moving average plus a higher line representing the moving average plus a set number of standard deviations from average price (for the same number of periods as used to calculate the moving average) and a lower line that is a moving average minus the same number of standard deviations.

4
Q

Candlestick chart

A

A price chart with four bits of data for each time interval. A candle indicates the opening and closing price for the interval. The body of the candle is shaded if the opening price was higher than the closing price, and the body is clear if the opening price was lower than the closing price. Vertical lines known as wicks or shadows extend from the top and bottom of the candle to indicate the high and the low prices for the interval.

5
Q

CBOE Volatility Index

A

A measure of near-term market volatility as conveyed by S&P 500 stock index option prices

6
Q

Change in polarity principle

A

A tenet of technical analysis that once a support level is breached, it becomes a resistance level. The same holds true for resistance levels; once breached, they become support levels.

7
Q

Continuation patterns

A

A type of pattern used in technical analysis to predict the resumption of a market trend that was in place prior to the formation of a pattern.

8
Q

Convergence

A

The tendency for differences in output per capita across countries to diminish over time; in technical analysis, a term that describes the case when an indicator moves in the same manner as the security being analyzed.

9
Q

Death cross

A

A technical analysis term that describes a situation where a short-term moving average crosses from above a longer-term moving average to below it; this movement is considered bearish.

10
Q

Divergence

A

In technical analysis, a term that describes the case when an indicator moves differently from the security being analyzed.

11
Q

Double bottoms

A

In technical analysis, a reversal pattern that is formed when the price reaches a low, rebounds, and then sells off back to the first low level; used to predict a change from a downtrend to an uptrend.

12
Q

Double top

A

In technical analysis, a reversal pattern that is formed when an uptrend reverses twice at roughly the same high price level; used to predict a change from an uptrend to a downtrend.

13
Q

Elliott wave theory

A

A technical analysis theory that claims that the market follows regular, repeated waves or cycles.

14
Q

Fibonacci sequence

A

A sequence of numbers starting with 0 and 1, and then each subsequent number in the sequence is the sum of the two preceding numbers. In Elliott Wave Theory, it is believed that market waves follow patterns that are the ratios of the numbers in the Fibonacci sequence.

15
Q

Flags

A

A technical analysis continuation pattern formed by parallel trendlines, typically over a short period.

16
Q

Golden cross

A

A technical analysis term that describes a situation where a short-term moving average crosses from below a longer-term moving average to above it; this movement is considered bullish.

17
Q

Head and shoulders pattern

A

In technical analysis, a reversal pattern that is formed in three parts: a left shoulder, head, and right shoulder; used to predict a change from an uptrend to a downtrend.

18
Q

Intermarket analysis

A

A field within technical analysis that combines analysis of major categories of securities—namely, equities, bonds, currencies, and commodities—to identify market trends and possible inflections in a trend.

19
Q

Kondratieff wave

A

A 54-year long economic cycle postulated by Nikolai Kondratieff.

20
Q

Line chart

A

In technical analysis, a plot of price data, typically closing prices, with a line connecting the points.

21
Q

Linear scale

A

A scale in which equal distances correspond to equal absolute amounts.

22
Q

Logarithmic scale

A

A scale in which equal distances represent equal proportional changes in the underlying quantity.

23
Q

Momentum oscillators

A

A graphical representation of market sentiment that is constructed from price data and calculated so that it oscillates either between a high and a low or around some number.

24
Q

Moving average

A

The average of the closing price of a security over a specified number of periods. With each new period, the average is recalculated.

25
Q

Moving-average convergence/divergence oscillator

A

(MACD) A momentum oscillator that is constructed based on the difference between short-term and long-term moving averages of a security’s price.

26
Q

Overbought

A

A market condition in which market sentiment is thought to be unsustainably bullish.

27
Q

Oversold

A

A market condition in which market sentiment is thought to be unsustainably bearish.

28
Q

Pennants

A

A technical analysis continuation pattern formed by trendlines that converge to form a triangle, typically over a short period.

29
Q

Point and figure chart

A

A technical analysis chart that is constructed with columns of X’s alternating with columns of O’s such that the horizontal axis represents only the number of changes in price without reference to time or volume.

30
Q

Put/call ratio

A

A technical analysis indicator that evaluates market sentiment based upon the volume of put options traded divided by the volume of call options traded for a particular financial instrument.

31
Q

Relative strength analysis

A

A comparison of the performance of one asset with the performance of another asset or a benchmark based on changes in the ratio of the securities’ respective prices over time.

32
Q

Relative strength index

A

A technical analysis momentum oscillator that compares a security’s gains with its losses over a set period.

33
Q

Resistance

A

In technical analysis, a price range in which selling activity is sufficient to stop the rise in the price of a security.

34
Q

Retracement

A

In technical analysis, a reversal in the movement of a security’s price such that it is counter to the prevailing longerterm price trend.

35
Q

Reversal patterns

A

A type of pattern used in technical analysis to predict the end of a trend and a change in direction of the security’s price.

36
Q

Support

A

In technical analysis, a price range in which buying activity is sufficient to stop the decline in the price of a security.

37
Q

Technical analysis

A

A form of security analysis that uses price and volume data, which is often displayed graphically, in decision making.

38
Q

Trend

A

A long-term pattern of movement in a particular direction.

39
Q

Triangle patterns

A

In technical analysis, a continuation chart pattern that forms as the range between high and low prices narrows, visually forming a triangle.

40
Q

TRIN

A

A flow of funds indicator applied to a broad stock market index to measure the relative extent to which money is moving into or out of rising and declining stocks.

41
Q

Triple bottoms

A

In technical analysis, a reversal pattern that is formed when the price forms three troughs at roughly the same price level; used to predict a change from a downtrend to an uptrend.

42
Q

Triple tops

A

In technical analysis, a reversal pattern that is formed when the price forms three peaks at roughly the same price level; used to predict a change from an uptrend to a downtrend.