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Answers to the Quiz Questions

Question 1: The 2 candles numbered 1 and 2 in the box is a Bearish Engulfing Pattern. Note that a bearish engulfing must come after an uptrend, and candle 2 real body must engulf candle 1's real body. Note that in an intraday chart, the close of candle 1, will be either identical or very close to the open of candle 2.

Question 1

Question 2: When a former support becomes new resistance or, when a former resistance becomes new support, this is known as Change of Polarity. In this example, the low of the hammer which is creating a support, becomes new resistance to the right of the chart as it was tested multiple times. Also, before the hammer, on the left side of the chart, you will also see that the same line was old support. Multi tested lines will become stronger then single tested areas.

Question 2

Question 3: The 3 candles in the box on this chart is a Morning Star pattern. Morning Star's require the immediate prior trend to be a downtrend, first candle would be a long bearish candle, second candle is a small real body, and the third candle closes deeply or above the first candle in the pattern.

Question 3

Question 4: On this chart, you will see that the market tested the same resistance area, with a bearish engulfing pattern, which also had an upper shadow that went above resistance, but could not stay above it. Without other indicators on this chart, hard to tell, but it is in an overbought condition as well. We do recommend to use other indicators on charts. Please note that there was not other indicators on this due to keeping this chart easy to view for the purpose of the quiz.

Question 4

Question 5: On this chart, you will see that there should be a support line drawn at the bottom of the Bullish Engulfing pattern which also is in the area of top of the Rising Window in the area of 23,376 and 23,435

Question 5

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