A technical analyst with Bullfighter.com, a noted investment research firm, has been examining the U.S. securities markets, and believes that the market is technically "oversold." Which of the following technical indicators would this analyst likely use to support his opinion? Choose the best answer.
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A. B. C. D. E. F.D
The % of issues trading below their 200-day moving average is frequently cited by technical analysts as a measure of oversold and overbought market conditions.
Specifically, technical analysts see the market as "oversold" when 80% of issues are trading below their 200-day moving average, and consider a market
"overbought" when 80% of issues are trading above their 200-day moving average.
The "Diffusion Index" is a measure of market breadth, and is defined as [(# of advancing issues + 1/2 # of issues unchanged) / # of issues traded]. The Confidence
Index is used as a measure of international sentiment, and a decline in this index is indicative of widespread investor uncertainty. The CBOE Put/Call Ratio is a contrarian technical indicator used to gauge the sentiment of investment professionals, and a ratio greater than 50% would be viewed by contrarian technical analysts as bullish.