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Rally

Rally

What is a 'Rally'

A rally is a period of sustained increases in the prices of stocks, bonds or indexes. This type of price movement can happen during either a bull or a bear market, when it is known as either a bull market rally or a bear market rally respectively. However, a rally will generally follow a period of flat or declining prices.

Explaining 'Rally'

A rally is caused by a significant increase in demand resulting from a large influx of investment capital into the market which leads to the bidding up of prices. The length or magnitude of a rally depends on the depth of buyers along with the amount of selling pressure they face. For example, if there is a large pool of buyers but few investors willing to sell, there is likely to be a large rally. If, however, the same large pool of buyers is matched by a similar amount of sellers, the rally is likely to be short and the price movement minimal.

Identifying a Rally

The term “rally” is used very loosely when referring to upward swings in markets. The duration of a rally is what varies from one extreme to another, and is relative depending on the time frame used when analyzing markets. A rally to a day trader may be the first 30 minutes of the trading day in which price swings keep making new highs, while a portfolio manager for a large retirement fund looking at a much larger picture may perceive the last calendar quarter as a rally, even when the last year has been a bear market.

Underlying Causes of Rallies

The causes of rallies also vary significantly. Short-term rallies can result from news stories or events that create a short-term imbalance in supply and demand. Very sizeable buying activity in a particular stock or sector by a large fund, or an introduction of a new product by a popular brand can have a similar effect that results in a short-term rally. For example, almost every time Apple Inc. has launched a new iPhone, its stock has rallied by an average of 23 percent over the next six months.


Further Reading

Short positions, rally fears and option marketsShort positions, rally fears and option markets
www.tandfonline.com [PDF]
… Applied Mathematical Finance … Nonetheless, these latter fears of a market rally may be sufficiently curtailed in financial markets by the absence of significant … Furthermore the financing of longer term downside protection by the writing of covered calls also tends to dampen the …

Santa Claus Rally and firm sizeSanta Claus Rally and firm size
www.emerald.com [PDF]
… Applied Mathematical Finance … Nonetheless, these latter fears of a market rally may be sufficiently curtailed in financial markets by the absence of significant … Furthermore the financing of longer term downside protection by the writing of covered calls also tends to dampen the …

The socio-economic impact of the FIA World Rally Championship 2007The socio-economic impact of the FIA World Rally Championship 2007
www.tandfonline.com [PDF]
… Applied Mathematical Finance … Nonetheless, these latter fears of a market rally may be sufficiently curtailed in financial markets by the absence of significant … Furthermore the financing of longer term downside protection by the writing of covered calls also tends to dampen the …

Singapore's National Day Rally speech: A site of ideological negotiationSingapore's National Day Rally speech: A site of ideological negotiation
www.tandfonline.com [PDF]
… Applied Mathematical Finance … Nonetheless, these latter fears of a market rally may be sufficiently curtailed in financial markets by the absence of significant … Furthermore the financing of longer term downside protection by the writing of covered calls also tends to dampen the …

The role of effort in moderating the anxiety–performance relationship: Testing the prediction of processing efficiency theory in simulated rally drivingThe role of effort in moderating the anxiety–performance relationship: Testing the prediction of processing efficiency theory in simulated rally driving
www.tandfonline.com [PDF]
… Applied Mathematical Finance … Nonetheless, these latter fears of a market rally may be sufficiently curtailed in financial markets by the absence of significant … Furthermore the financing of longer term downside protection by the writing of covered calls also tends to dampen the …

Enriching Economics through Global Education and Service Learning: 5th Graders Rally around the Rainforest.Enriching Economics through Global Education and Service Learning: 5th Graders Rally around the Rainforest.
eric.ed.gov [PDF]
… Applied Mathematical Finance … Nonetheless, these latter fears of a market rally may be sufficiently curtailed in financial markets by the absence of significant … Furthermore the financing of longer term downside protection by the writing of covered calls also tends to dampen the …

The great he-cession: Why feminists should rally for the end of white supremacist capitalist patriarchyThe great he-cession: Why feminists should rally for the end of white supremacist capitalist patriarchy
www.tandfonline.com [PDF]
… Applied Mathematical Finance … Nonetheless, these latter fears of a market rally may be sufficiently curtailed in financial markets by the absence of significant … Furthermore the financing of longer term downside protection by the writing of covered calls also tends to dampen the …

Coronavirus Spreads and Bitcoin's 2020 Rally: Is There a Link?Coronavirus Spreads and Bitcoin's 2020 Rally: Is There a Link?
hal.archives-ouvertes.fr [PDF]
… Applied Mathematical Finance … Nonetheless, these latter fears of a market rally may be sufficiently curtailed in financial markets by the absence of significant … Furthermore the financing of longer term downside protection by the writing of covered calls also tends to dampen the …

A triple bottom line analysis of the impacts of the Hail International Rally in Saudi ArabiaA triple bottom line analysis of the impacts of the Hail International Rally in Saudi Arabia
www.tandfonline.com [PDF]
… Applied Mathematical Finance … Nonetheless, these latter fears of a market rally may be sufficiently curtailed in financial markets by the absence of significant … Furthermore the financing of longer term downside protection by the writing of covered calls also tends to dampen the …

Porto street stage at Rally Portugal: the determinants of the length of stayPorto street stage at Rally Portugal: the determinants of the length of stay
www.tandfonline.com [PDF]
… Applied Mathematical Finance … Nonetheless, these latter fears of a market rally may be sufficiently curtailed in financial markets by the absence of significant … Furthermore the financing of longer term downside protection by the writing of covered calls also tends to dampen the …


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