A market rally refers to a sustained period in which stock prices rise broadly across the market or within a specific sector. During market rallies, investor sentiment typically improves as buying pressure pushes prices higher.

Rallies can occur within longer bull markets or even during broader downturns. Understanding how rallies form and evolve helps investors interpret momentum and avoid reacting purely to short-term enthusiasm.

Recognizing the dynamics behind a rally allows investors to make more disciplined decisions.

Definitions of a Market Rally

A market rally describes a period when stock prices rise significantly over a relatively short timeframe.

Rallies can occur in several forms:

• A broad market rally affecting major…