A point and figure chart:
I. Gives a sell signal when the stock price penetrates previous lows
II. Tracks significant upward or downward movements
III. Has no time dimension
IV. Indicates congestion areas
A) I and II only
B) II and III only
C) I, III, and IV only
D) I, II, III, and IV

Question

Quizplus · Accepted Answer

Point and figure charts are designed to filter out smaller price movements, focusing on significant upward or downward trends (II), and they do not incorporate a time dimension, as they are concerned only with price movements (III). They give sell signals when the price penetrates previous lows (I) and can indicate congestion areas where the price moves within a tight range (IV).

A Point and Figure Chart