#MarketPullback

What is a Market Pullback?

A market pullback is a temporary reversal or decline in the price of a stock, asset, or the overall market, following a period of upward movement. It’s generally seen as a short-term drop, often between 5% to 10%, that happens before the market resumes its upward trend.

Key Points About Market Pullbacks:

Not a full reversal: It’s different from a bear market or a full downtrend; a pullback is usually a pause or correction within an overall uptrend.

Common and healthy: Pullbacks are normal and can help prevent markets from overheating.

Opportunity for buyers: Many traders see pullbacks as opportunities to buy at a slightly lower price during an ongoing bullish trend.

Causes: Pullbacks can be caused by profit-taking, minor negative news, or temporary shifts in investor sentiment.

Example

Imagine a stock rising steadily from $100 to $120, then dropping back to $110 before continuing its rise. That drop from $120 to $110 is a pullback.