Is This A Dead Cat Bounce?

View all

How can you tell if a dead cat is bouncing?

A dead cat bounce is when the price gaps down 5% or more, continues to decline after the open, but then has a rally. Watch for the price to rally back into the vicinity of the open price. The area around the open price is likely to be a resistance level. This is, once again, a guide.

What is the opposite of a dead cat bounce?

An inverted dead-cat bounce is an event pattern so named because it seemed to be the opposite of a dead-cat bounce. The inverted dead-cat bounce occurs when a company announces news that sends the stock soaring by 5% to 20% or even higher.

What is a dead cat bounce in stocks?

A dead cat bounce is a temporary recovery of asset prices from a prolonged decline or a bear market that is followed by the continuation of the downtrend. A dead cat bounce is a small, short-lived recovery in the price of a declining security, such as a stock.

What does a dead cat mean?

The dead cat strategy, or deadcatting, refers to the introduction of a dramatic, shocking, or sensationalist topic to divert discourse away from a more damaging topic. The strategy, or at least the “dead cat” metaphor to describe it, is particularly associated with Australian political strategist Lynton Crosby.