[CMA] Chartered Market Analyst Practice Exam

CMT Practice Questions
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1. When analyzing long term price movements, it could be helpful to use which
type of chart?

a. Candle chart
b. Logarithmic chart
c. Bar chart
d. Point and figure chart: Answer: b. Logarithmic chart

Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The
Complete Resource for Financial Market Technicians. Chapter 11.
2. Which of the following would MOST likely be a continuation pattern?

a. Engulfing pattern
b. Head and shoulders
c. Double bottom
d. Flag: Answer: d. Flag

Reference: Edwards, Robert D. and Magee, John, Technical Analysis of Stock
Trends, 9th Edition. Chapter 11.
3. Which of the following would NOT be considered a support level?

a. Previous high
b. Previous low
c. Trading range
d. All the above are considered to be support levels: Answer: d. All the above
are considered to be support levels

Reference: Edwards, Robert D. and Magee, John, Technical Analysis of Stock
Trends, 9th Edition. Chapter 13.
4. According to Robert Rhea's hypotheses:
I. The primary trend is inviolate
II. The averages discount everything
III. Dow Theory is not infallible
IV. Dow Theory is predictable

a. I and II
b. I and III
c. I, II, and III
d. I, II, III, and IV: Answer: c. I, II, and III


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Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The
Complete Resource for Financial Market Technicians. Chapter 6.
5. For a breakout or breakdown from a triangle to be considered valid it should
occur NO MORE than _______ of the distance to the apex from the beginning
of the pattern?

a. One-half
b. Two-thirds
c. Three-quarters
d. Five-sixths: Answer: c. Three-quarters

Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The
Complete Resource for Financial Market Technicians. Chapter 15.
6. What is indicated when Bollinger Bands narrow?

a. A stock is ready for a rally
b. A stock is ready for a decline
c. A stock's volatility has increased
d. A stock's volatility has decreased: Answer: d. A stock's volatility has decreased

Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The
Complete Resource for Financial Market Technicians. Chapter 14.
7. In the Dow Theory, the MOST important price is the

a. Open
b. High
c. Low
d. Close: Answer: d. Close

Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The
Complete Resource for Financial Market Technicians. Chapter 6.
8. Which is/are considered important in determining the validity of a trendline
break?

a. Time
b. Price
c. Volume
d. All of the above: Answer: d. All the above


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Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The
Complete Resource for Financial Market Technicians. Chapter 13.
9. Which BEST characterizes continuation patterns?

a. There is sideways price action
b. They take a long time to form
c. They usually represent long-term patterns
d. They signal the start of a new trend: Answer: a. There is sideways price action

Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The
Complete Resource for Financial Market Technicians. Chapter 17.
10. Which is NOT true of a buying climax?

a. Prices fall sharply at first
b. Volume is very heavy
c. The close is near the low end of the daily range
d. Prices initially rise sharply: Answer: a. Prices fall sharply at first

Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The
Complete Resource for Financial Market Technicians. Chapter 15.
11. In order for a Dow Theory sell signal to be confirmed

a. The Dow Jones Industrials (DJI) and the Dow Transports (DJT) must peak
simultaneously
b. The DJI and DJT must fail to confirm at the highs
c. Both the DJI and DJT must break below an important intermediate term
support level
d. b and c: Answer: d. b and c

Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The
Complete Resource for Financial Market Technicians. Chapter 6.
12. The Dow Theory uses ONLY

a. High prices
b. Low prices
c. Closing prices
d. All of the above: Answer: c. Closing prices



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Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The
Complete Resource for Financial Market Technicians. Chapter 6.
13. Point and figure charts are LEAST suited to

a. Establishing targets
b. Identifying areas of accumulation or distribution
c. Identifying areas of support and resistance
d. Identifying breakouts: Answer: b. Identifying areas of accumulation or distribu-
tion

Reference: du Plessis, Jeremy. The Definitive Guide to Point and Figure. Chapter 1
14. In a doji candlestick

a. Supply exceeds demand
b. Demand exceeds supply
c. Supply and demand are in balance
d. All the above: Answer: c. Supply and demand are in balance

Reference: Dahlquist, Julie R., and Charles D. Kirkpatrick. Technical Analysis: The
Complete Resource for Financial Market Technicians. Chapter 17.
15. When using a moving average crossover system to generate buy/sell
signals, a SELL signal would be generated when

a. The slower moving average falls below the faster average
b. The slow rises above the fast
c. The fast falls below the slow
d. Either a or c: Answer: c. The fast falls below the slow

Reference: Pring, Martin J. Technical Analysis Explained. Chapter 9.
16. Moving averages are of LEAST use in generating buy or sell signals in

a. A sideways trend
b. A moderately sloping uptrend
c. A steep downtrend
d. Not especially useful in any of them: Answer: a. A sideways trend

Reference: Pring, Martin J. Technical Analysis Explained. Chapter 9.
17. A stock trades in a range between 51 and 55 for 10 days and then moves
higher. If you have been charting the stock with a 3 box reversal point and