Question

When a security that was in an upward trend falls 1% below its trendline, a technical analyst will most likely determine that:

a) The security is a good buy
b) The security is overvalued
c) The trend is continuing
d) The trend has reversed

Answer 1

When a security falls 1% below its trendline, a technical analyst will determine that the trend has reversed.

Step-by-step explanation:

When a security that was in an upward trend falls 1% below its trendline, a technical analyst will most likely determine that the trend has reversed. An upward trend is characterized by consistent increases in stock prices over time. However, when the security falls below its trendline, it indicates a shift in momentum and suggests that the trend is no longer continuing.