Anonymous ID: 3ffab6 June 15, 2022, 12:46 p.m. No.16451975   ๐Ÿ—„๏ธ.is ๐Ÿ”—kun

>>16451800

By JAMES CHEN Updated June 02, 2022

Reviewed by CHARLES POTTERS

Fact checked by SUZANNE KVILHAUG

What Is a Dead Cat Bounce?

A dead cat bounce is a temporary, short-lived recovery of asset prices from a prolonged decline or a bear market that is followed by the continuation of the downtrend. Frequently, downtrends are interrupted by brief periods of recoveryโ€”or small ralliesโ€”during which prices temporarily rise.

 

The name "dead cat bounce" is based on the notion that even a dead cat will bounce if it falls far enough and fast enough. It is an example of a sucker's rally.

 

KEY TAKEAWAYS

A dead cat bounce is a short-lived and often sharp rally that occurs within a secular downtrend, or one that is unsupported by fundamentals that is reversed by price movement to the downside.

In technical analysis, a dead cat bounce is considered to be a continuation pattern, where at first the bounce may appear to be a reversal of the prevailing trend, but it is quickly followed by a continuation of the downward price move.

Dead cat bounce patterns are usually only realized after the fact and are difficult to identify in real-time.