• A dead cat bounce is a short-lived and often sharp rally that occurs within a century-old downtrend.
  • This is a rally, not supported by fundamentals, which is reversed by the price movement down.
  • In technical analysis, a dead cat bounce is considered a continuation pattern.
  • At first, the bounce may seem like a reversal of the prevailing trend, but it is quickly followed by a continuation of the downward price movement.
  • Dead cat rebound patterns are usually only realized after the fact and are difficult to identify in real time.