CFTeII Examination Question Paper - 11 April 2024
TIME ALLOWED: 3 ½ HOURS
Question 1: Answer both Part A and B
Question 2: Answer all three questions
Questions 3-7: Answer two questions from each of five questions
To pass the exam, you must acquire a minimum mark of 65 out of 100 possible points.
Question 1: Part A and Part B (Required)
Maximum 40 points
Question 1. Part A (Note: Chart annotations are a very important part of your analysis. Trend lines, Pattern etc.
should be carefully drawn and labeled.)
Charts 1 through 7 are charts of the S&P 500. Charts are for different time frames.
1. Analyze these charts from a long-term, intermediate-term and short-term perspective. Include the following
in your analysis and recommendations. All recommendations must be supported with the use of:o Trends from different time frames, support/resistance levels, signs of weakness/strength, as well asindicators and moving averages included on the charts.
o Your expectation and recommendations regarding the future direction of this market including short,intermediate and long-term views. Your answer should be well supported with acceptable technicalanalysis.
o What are your recommendations for both long and short-term clients? Please explain your trading tactic
and money management technique for those who have exposure in the market, and those who arecompletely out of the market.
Part B: (Note: Please keep in mind, that there is not one single, “absolute”, correct answer when reallocating theweight percentages of the underlyings. Marks will be awarded for your clear argumentation.)
2. An investor has the following weights in his portfolio:
o S&P 500 (Equity): 50%
o T-Note: 50%
o Gold: 30%
o Oil: 0%
Based on Charts 8 through 13 and their attached indicators, what do you recommend the investor to do? Youranswers should include the following:oooA brief analysis on these different markets (S&P, Gold, Oil, Yields)
An explanation of what markets should be over weighted, and what markets should be underweighted. You
must mention the reasons for your re-allocations.
Please rebalance the weights of these different markets based on their performance.

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CFTeII Examination Question Paper - 11 April 2024
TIME ALLOWED: 3 ½ HOURSQuestion 2Answer ALL THREE sub-questions (Required)
Maximum 10 Points
1- Sam is a technical analyst in a large brokerage company. The managing director of the company asked Sam tolook at the following five stocks which are owned by one of the big clients in the company to give her proper
recommendations.
Apple Inc with a weight of 25% of her total portfolio, Boeing with a weight of 25%, Nike with a weight of 20% of hertotal portfolio, Walt Disney with a weight of 15%, and Caterpillar with a weight of 15%
First of all, based on the overall S&P performance should Sam recommend to keep her 100% equity exposure orshould she decrease the equity exposure and buy other markets? You can look at the previous RS charts to help you
answer this question

Second, concerning her equity exposure, and if the client will not buy any additional stock, how will Sam reassess
the situation and fix the weights to cope better with the stocks’ performance.
Note: The weekly charts below are with the same order, and the indicator attached is an MACD indicator, alongwith the 20 weeks Exponential Moving average. (5 points)* Please start each answer on a fresh sheet of paper
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CFTeII Examination Question Paper - 11 April 2024
TIME ALLOWED: 3 ½ HOURSAAPLBoeing* Please start each answer on a fresh sheet of paper
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International Federation of Technical Analysts 2024©

CFTeII Examination Question Paper - 11 April 2024
TIME ALLOWED: 3 ½ HOURS

NikeWalt Disney* Please start each answer on a fresh sheet of paper
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International Federation of Technical Analysts 2024©

CFTeII Examination Question Paper - 11 April 2024
TIME ALLOWED: 3 ½ HOURS

2- Explain in details the calculation of the Slow Stochastic Oscillator with values of 9,5,3 (3 points)
3- Explain the psychology of the hammer formation and that of the shooting star. (2 points)* Please start each answer on a fresh sheet of paper
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CFTeII Examination Question Paper - 11 April 2024
TIME ALLOWED: 3 ½ HOURS
Questions 3-7
Answer TWO questions for each question (Required)
Maximum 50 points (5 points for each question)
Question 3. (ANSWER TWO QUESTIONS)
1- You were monitoring a stock that is witnessing a major uptrend. The stock witnessed a lower highformation. This action gave you a feeling that the trend is going to reverse. Then the following bottom washigher than the previous one. Explain the formation that was formed, its psychology, and the expectedmarket direction after this formation is solved. (5 points)
2- Sentiment indicators are important as they show the overall emotions of market participants. During major
market peaks, these indicators give us important signals that the crowd is extremely optimistic. Explain any
two sentiment indicators that give us important signals during major market peaks. (5 points)
3- As a technical analyst, what charting technique do you like to use generally? Bar charts, candlesticks
charting technique, point and figure, etc… explain the reasoning of your preference and the edge thischarting technique gives you over the rest. (5 points)
Question 4. (ANSWER TWO QUESTIONS)
1- The concept of support and resistance is of paramount importance as it is the essence of technical analysis.
Our work is mainly based on depicting strong support and resistance levels either we buy at their testing or
their breakouts. Please explain the importance of this concept, explaining different kinds of support andresistance levels. Include in your answer which are the strongest support and resistance levels and how doyou use them in your investment strategies. (5 points)
2- The Money Flow Index is a volume indicator that was inspired from Wilder’s RSI. Please explain the MFI, its
calculation and its main uses. (5 points)
3- Explain the difference between Renko charts and point and figure charts. (5 points)* Please start each answer on a fresh sheet of paper
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International Federation of Technical Analysts 2024©

CFTeII Examination Question Paper - 11 April 2024
TIME ALLOWED: 3 ½ HOURS

Question 5. (ANSWER TWO QUESTIONS)
1- One of the most important theories in Technical Analysis is the Dow Theory. Please explain the importanceof the Dow Theory and why did it stand the test of time for most of its tenets. State all of the tenets of thistheory and explain in details only one of them. (5 points)
2- Market breadth is important as it tells us that health of the overall market. Explain the concept ofdivergence in these indicators and what do they tell us when they diverge from the index. (5 points)
3- In the Ichimoku charting technique, explain the importance of Leading Span 1 and Leading Span 2 and how
do we use them. (5 points)
Question 6. (ANSWER TWO QUESTIONS)
1- The RSI does not always move between 0 and 100. Explain this statement and explain how does theoscillator move during different trend directions. Explain a trading tactic using the RSI during a strong
uptrend. (5 points)
2- Explain the calculation of the MACD and explain as much detailed as possible the main uses of thisindicator. You can also explain your favorite technique in using the MACD. (5 points)
3- What is the reliability and impact of the negative seasonality pattern during September and October? (5points)
Question 7. (ANSWER TWO QUESTIONS)
1- What are the four types of triangles in Elliott wave theory? (5 points)
2- How will the width of a Point and Figure base pattern influence its price target? (5 points)
3- During sudden and quick trend reversals, the ADX will not read the new trend correctly in the beginning.
Explain this drawback and why does it happen. (5 points)* Please start each answer on a fresh sheet of paper
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International Federation of Technical Analysts 2024©

CHART 1: Yearly Chart: log scale
10 years Exponential Moving Average

CHART 2: Monthly Chart: log scale
20 months Exponential Moving Average
MACD (12,26,9)

CHART 3: Monthly Chart: Arithmetic Scale
RSI (14 periods)+DI / -DI from the DMI System

CHART 4: Weekly Chart: Arithmetic Scale
Bollinger Bands: 20 week SMA + 2 St. Dev
MACD: (12,26,9)

CHART 5: Weekly Chart: Arithmetic Scale
CCI(20 weeks)

Stochastic Oscillator: (9,5,3)

CHART 6: Daily Chart: Arithmetic Scale
Stochastic Oscillator:
Momentum Oscillator (14 periods)(9,5,3)

CHART 7: Daily Chart: Arithmetic Scale
MACD Histogram500450400x10414039383736353433323130292023

February

April

May

JuneJuly

AugustSeptember

November

CHART 8: S&P versus Yields
Upper Window: S&P 500 Index – Daily Bar ChartLower Window: S&P 500 Index vs. CBOE 10-Year Treasury Yield RS line

2024

February

April

CHART 9: S&P 500 Index versus Crude Oil
Upper Window: S&P 500 Index – Daily Bar Chart
Lower Window: S&P 500 Index vs. Crude Oil RS

CHART 10: S&P 500 Index versus Gold
Upper Window: S&P 500 Index – Daily Bar Chart
Middle Window: S&P 500 Index vs. Gold RS line
Lower Window: MACD of the RS line (S&P versus Gold)

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180x103020100-10-20
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4504002023

FebMarAprMayJunJulAug

Sep

CHART 11: Gold versus Yields
Upper Window: Gold– Daily Bar Chart
Middle Window: Gold MACD Indicator
Lower Window: Gold vs. CBOE 10-Year Treasury Yield RS line

Oct

Nov

Dec

2024

FebMarApr

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2023 FM

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CHART 12: Treasury Yield versus Crude Oil
Upper Window: CBOE 10-Year Treasury Yield – Daily Bar ChartLower Window: CBOE 10-Year Treasury Yield vs. Crude Oil RS line

2024FMAMJCHART 13: Crude Oil versus Gold
Upper Window: Crude Oil – Daily Bar Chart
Middle Window: Crude Oil vs. Gold RS lineLower Window: Relative Strength Index (RSI) of the RS line (Oil vs. gold)