Dead cat bounce: All you need to know about this golden opportunity

A dead cat bounce suggests that more weakness is likely to emerge in the near term

As per the theory, a dead cat bounce is a continuation pattern where the bounce is expected to hit strong resistances and re-join the earlier downward trend.  A dead cat bounce, thus, is believed to be short-lived. The name “Dead Cat bounce” is based on the notion that even a dead cat will bounce, if it falls far or falls with a high speed.

However, it has been observed, especially in recent times, that a dead cat bounce often leads to a firm reversal, on the back of follow-up buying.

Implications:

-- Although, a dead cat bounce suggests that more weakness is likely