Question

"The more of the following characteristics that a bear breakout has, the more likely the breakout will be strong:"

A) High volume, narrow spread, close near the low, and follow-through
B) Low volume, wide spread, close near the high, and reversal
C) High volume, wide spread, close near the high, and follow-through
D) Low volume, narrow spread, close near the low, and reversal

Answer 1

In a bear market, a strong bear breakout is characterized by high volume, a narrow spread, closing near the low, and follow-through, as opposed to a bull market where values move upward.

Step-by-step explanation:

The characteristics you're referring to in the question describe conditions of a breakout in a bear market. In a bear market, values of equities move downward, which is the opposite of a bull market where values generally move upward. A bear breakout is typically characterized by high volume, a wide spread between the high and low prices, a close near the low of the trading range, and follow-through selling after the breakout. Therefore, the more of these characteristics that a bear breakout has, the more likely the breakout will be strong. Accordingly, the correct answer is A) High volume, narrow spread, close near the low, and follow-through.