What is Dead Cat Bounce?
More precisely, the correct term according to the word structure is Dead Cat Bounce (DCB) . Dead Cat Bounce is a term that is thick in the world of stock trading, especially those related to Technical. If translated literally word for word, Dead means dead, Bounce means reflection or jump while Cat means cat, but if interpreted as a whole into one term Dead Cat Bounce isa deceptive movement characterized by a temporary upward movement then followed by a downtrend. The term Dead Cat Bounce is a price correction in a downtrend (Bearish).
Why is the term associated with a cat? because this term is taken from the mythical philosophy of a cat that falls from a height and then comes back to life and jumps, just like stocks where there is a significant increase, but the movement is just a fake movement that can fool many investors where then the price will fall back to continue the trend.
There is a conversation in stock investing like this "the stock price has been very cheap and has gone down very deeply and it's time to buy up stocks because it's time for a bullish reversal". From this expression, there must be some investors who are still optimistic that stock prices are still likely to fall and that is only a correction or investors suspect that it is just a Dead Cat Bounce, but some are deceived and think the stock price is very cheap, they intend to buy shares. but in a short time the stock price was still falling and getting deeper.
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