The Tendency of Poorly Performing Stocks and Well-Performing Stocks in One

question 1

Multiple Choice

The tendency of poorly performing stocks and well-performing stocks in one period to continue their performance into the next period is called the ________.

• A) fad effect
• B) martingale effect
• C) momentum effect
• D) reversal effect

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Definitions:

Market Index

A statistical measure that represents the value of a section of the stock market, helping investors compare current price levels with past prices to calculate market performance.

Relative Strength

A momentum investing technique that compares the performance of a stock or security to the market or its peers.

Support Level

Support Level is a price level at which a security tends to stop falling because there is more demand than supply, potentially preventing the price from declining further.

10-day Minimum Price

The lowest trading price of a security over a 10-day period, often used by traders to make buying or selling decisions.