Series 7 Exam Question 345: Answer and Explanation

Question: 345

A saucer formation is an indication that a security is

• A. consolidating
• B. breaking out
• C. reversing from a bullish trend
• D. reversing from a bearish trend

Correct Answer: D

Explanation:

D. A saucer formation is similar to an inverted head and shoulders pattern in that it is a reversal of a bearish trend. However, a saucer formation is a more gradual change in direction. A saucer formation is a bullish sign, and an inverted saucer formation is a bearish sign.