CHARTERED MARKET TECHNICIAN
(CMT) EXAMINATION QUESTION AND
CORRECT ANSWERS (VERIFIED
ANSWERS) PLUS RATIONALES 2026 Q&A
INSTANT DOWNLOAD PDF
1. Which type of chart displays price movements using vertical lines showing
high, low, open, and close?
A. Line chart
B. Point and Figure chart
C. Bar chart
D. Renko chart
Bar charts show open, high, low, and close prices, providing more detail
than line charts.
2. A trendline is considered valid when it connects at least:
A. One price point
B. Two price points
C. Three price points
D. Five price points
Two points are the minimum required to define a trendline, though more
points increase reliability.
3. In Dow Theory, which phase represents informed investors entering the
market?
A. Public participation phase
B. Accumulation phase
C. Distribution phase
, D. Capitulation phase
The accumulation phase occurs when informed investors buy before
broader market recognition.
4. Which indicator measures market momentum by comparing recent gains to
recent losses?
A. MACD
B. Relative Strength Index (RSI)
C. Stochastic Oscillator
D. On-Balance Volume
RSI quantifies momentum by analyzing the magnitude of recent price
changes.
5. A head and shoulders pattern is generally considered:
A. A continuation pattern
B. A reversal pattern
C. A volatility pattern
D. A consolidation pattern
Head and shoulders typically signals a trend reversal from bullish to
bearish.
6. Which moving average gives more weight to recent prices?
A. Simple moving average
B. Exponential moving average
C. Weighted moving average
D. Cumulative moving average
EMAs react faster to price changes because they emphasize recent data.
7. Support levels are best described as:
A. Price areas where selling pressure increases
B. Price areas where buying interest is strong
C. Arbitrary price points
D. Resistance zones
Support occurs where demand tends to prevent further price declines.
, 8. Volume confirmation in technical analysis suggests that:
A. Volume always leads price
B. Price and volume are unrelated
C. Volume should increase in the direction of the trend
D. Low volume confirms breakouts
Rising volume in the trend direction strengthens the validity of the move.
9. Which oscillator is bounded between 0 and 100?
A. MACD
B. RSI
C. Momentum
D. Rate of Change
RSI oscillates between 0 and 100, making it easy to identify overbought
and oversold conditions.
10.A double bottom pattern indicates:
A. Continuation of a downtrend
B. Potential bullish reversal
C. Market indecision
D. Bearish continuation
Double bottoms often signal the end of a downtrend and the start of a
new uptrend.
11.Which chart type ignores time and focuses only on price movement?
A. Line chart
B. Candlestick chart
C. Point and Figure chart
D. Bar chart
Point and Figure charts plot price changes without regard to time.
12.The Efficient Market Hypothesis (EMH) challenges technical analysis
because it assumes:
A. Prices follow predictable cycles
B. Prices fully reflect all available information
C. Volume precedes price
(CMT) EXAMINATION QUESTION AND
CORRECT ANSWERS (VERIFIED
ANSWERS) PLUS RATIONALES 2026 Q&A
INSTANT DOWNLOAD PDF
1. Which type of chart displays price movements using vertical lines showing
high, low, open, and close?
A. Line chart
B. Point and Figure chart
C. Bar chart
D. Renko chart
Bar charts show open, high, low, and close prices, providing more detail
than line charts.
2. A trendline is considered valid when it connects at least:
A. One price point
B. Two price points
C. Three price points
D. Five price points
Two points are the minimum required to define a trendline, though more
points increase reliability.
3. In Dow Theory, which phase represents informed investors entering the
market?
A. Public participation phase
B. Accumulation phase
C. Distribution phase
, D. Capitulation phase
The accumulation phase occurs when informed investors buy before
broader market recognition.
4. Which indicator measures market momentum by comparing recent gains to
recent losses?
A. MACD
B. Relative Strength Index (RSI)
C. Stochastic Oscillator
D. On-Balance Volume
RSI quantifies momentum by analyzing the magnitude of recent price
changes.
5. A head and shoulders pattern is generally considered:
A. A continuation pattern
B. A reversal pattern
C. A volatility pattern
D. A consolidation pattern
Head and shoulders typically signals a trend reversal from bullish to
bearish.
6. Which moving average gives more weight to recent prices?
A. Simple moving average
B. Exponential moving average
C. Weighted moving average
D. Cumulative moving average
EMAs react faster to price changes because they emphasize recent data.
7. Support levels are best described as:
A. Price areas where selling pressure increases
B. Price areas where buying interest is strong
C. Arbitrary price points
D. Resistance zones
Support occurs where demand tends to prevent further price declines.
, 8. Volume confirmation in technical analysis suggests that:
A. Volume always leads price
B. Price and volume are unrelated
C. Volume should increase in the direction of the trend
D. Low volume confirms breakouts
Rising volume in the trend direction strengthens the validity of the move.
9. Which oscillator is bounded between 0 and 100?
A. MACD
B. RSI
C. Momentum
D. Rate of Change
RSI oscillates between 0 and 100, making it easy to identify overbought
and oversold conditions.
10.A double bottom pattern indicates:
A. Continuation of a downtrend
B. Potential bullish reversal
C. Market indecision
D. Bearish continuation
Double bottoms often signal the end of a downtrend and the start of a
new uptrend.
11.Which chart type ignores time and focuses only on price movement?
A. Line chart
B. Candlestick chart
C. Point and Figure chart
D. Bar chart
Point and Figure charts plot price changes without regard to time.
12.The Efficient Market Hypothesis (EMH) challenges technical analysis
because it assumes:
A. Prices follow predictable cycles
B. Prices fully reflect all available information
C. Volume precedes price
