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Nikita (SEBI RA)

21st Oct Β· SEBI-Registered Analyst

Dead Cat Bounce – Short-Lived Recovery πŸ“‰πŸ±

πŸ“Š The Dead Cat Bounce is a temporary recovery in a falling market before continuing the downtrend. βœ… Formation: 1️⃣ Sharp decline with heavy volume. 2️⃣ Small pullback or 2–3 green candles. 3️⃣ Quick resumption of selling pressure. βœ… Meaning: Weak recovery caused by short covering β€” not real buying interest. πŸ“Œ Example: Stock crashes β‚Ή950 β†’ β‚Ή780, then rebounds β‚Ή820 for two sessions and again falls β‚Ή760 β†’ Dead Cat Bounce β†’ continuation of downtrend. 🧠 Tip: Avoid buying in such bounces unless strong reversal confirmation appears.

MARUTI

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