What is a rally?
Rally, in stock market refers to a sudden, significant
rise in price of a particular security or in the total market. This can especially happen after a continuous
period of falling prices. Suppose the stock market has dropped in the morning, and the investors consequently
make haste to purchase companies at lower prices, then the stock market is said to have rallied.
It is caused due to a huge sum of money that enters the market, bidding the prices up. The magnitude or length
of a rally is dependent on the depth and volume of buyers, as
well as the amount of selling they do. Thus if there is a greater number of buyers but less investors intending
to sell, there is likelihood of a large rally. If the number of buyers matches the number of sellers, the rally
most likely will be of a short tenure with the price movement being minimal.
Rally is a period of sustained increase in stocks, bonds and prices
of indexes. This type of situation can take place either during a
bull market or a bear market.
Bear market rally
A bear market rally refers to a rally that occurs after a great amount of downward trend. A bear market rally
apparently is an indication of the markets making recovery. In other words it is turning around to a bull
market. However this might signify a temporary trend. Because of the inherent unpredictability associated with
this rally, it is also sometimes termed as a sucker rally. Many people are misguided into investing seeing the
upward trend only to be deceived shortly, when markets do fall.
Bull market rally
This is a sustained, prolonged period of rising investment prices, faster than the
historical average. One of the significant periods of bull market rally in the U.S. was in the early 1990s.
Free charting webinarMon, Nov 18th, 2013 12:00 PM - 1:00 PM ESTDuring the 60 minute session Paul Coghlan, founder of Coghlan Capital, looks at current charts for currencies, precious metals, US indices, highlighting turns and low risk entry points using the Median line analysis methodology. Median line analysis reduces risk and increases the chartists ability to see trend direction, trend
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