A stock bounce occurs when market forces—such as technical indicators, positive news, or a "market correction"—drive a price back up after it has fallen "too low". Traders look for the asset to "bounce" off a specific floor, signaling that buyers are stepping in to defend that price level. Key Indicators for a Bounce Buy
: A high-probability setup occurs when the price "bounces" off a major moving average, such as the 50-day MA , often viewed by institutional investors as a key psychological floor. bounce buy
: A true bounce is typically confirmed by an increase in trading volume, indicating strong conviction from buyers at the support level. Bounce Buy vs. Dead Cat Bounce A stock bounce occurs when market forces—such as
It is critical to distinguish between a genuine recovery and a : A true bounce is typically confirmed by
: A temporary, small recovery in the price of a declining asset, followed by a continuation of the downtrend. Practical Strategy: The "Double Confirmation"