Summary

  • Volume should increase in the direction of the current trend, for it to be sustained
  • Volume often precedes price, so a reducing volume in an uptrend may precede a reversal
  • Divergences between volume indicators and the price chart suggest trouble
  • Increasing open interest in an uptrend or down trend supports the trend
  • Falling open interest in either trend suggests the trend will weaken
  • High open interest can intensify any breakouts
  • A reversal day sets a new high or low, in trend, and retraces to close less than the previous day
  • Breakaway gaps occur on breakouts, and show a strong move
  • Runaway gaps occur in a freely moving trend, and may mark the halfway position
  • Exhaustion gaps mark the end of a trend, and are soon filled

At the end of each module there is a quiz. You can take a quiz at any point, but we suggest you view each module before taking the quiz. When you’re ready to start the quiz, click the take quiz ‘Start’ button below -:

The Masters Certificate in Technical Analysis - Module 5

Questions – Module 5
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