A price rally is when the stock’s price appreciates at a rapid pace over a period of time.
Price rallies can occur during both bull and bear markets. In bull markets, price rallies tend to be more durable and in a sustained fashion while bear market rallies are known to be vicious and short-lived as trapped investors use them to exit positions.
A price rally is the opposite of a market correction or crash, which is characterized by a sharp drop in the stock price. The duration of a rally can vary as per the time frame that is used for trading. For a day trader, even a 30-minute price surge could be characterized as a rally. On the other hand, long-term traders are likely to base their trades on weekly and monthly charts.
Go back to our full glossary.