#ReboundRally A rebound rally refers to a sharp recovery in stock prices or broader financial markets after a significant decline. It typically occurs when investors perceive assets as undervalued or when positive news, such as economic data or policy changes, sparks renewed confidence. Rebound rallies can be driven by short covering, where traders buy back stocks they had sold short, or by speculative buying. While such rallies can indicate improved market sentiment, they are often short-lived and may not signify a long-term trend reversal. Understanding the underlying causes is essential for distinguishing a rebound rally from a sustainable market recovery.