Series 7 Exam Question 234: Answer and Explanation

Question: 234

A head and shoulders bottom formation indicates

  • A. the reversal of a bullish trend
  • B. the reversal of a bearish trend
  • C. that the stock is moving sideways
  • D. that it might be a good time to sell short

Correct Answer: B

Explanation:

B. A head and shoulders bottom formation (inverted head and shoulders formation) is a bullish sign because it means that the stock hit a bottom and is starting to reverse. In other words, a head and shoulders bottom formation is a bullish sign because it's the reversal of a bearish trend.

All content of site and practice tests © 2022 Jack.
Quick View

FINRA Practice Tests