Beginners guide: What do we mean by Rally and a Crash at the markets?

by khalid on 13/10/2011 · 0 comments

In simple terms we define a rally as a race or a sharp increase. The same is applicable in terms of the share market which suggests gain made by the Sensex or Nifty during the course of the day. In case those gains are made on a regular basis then by all the market participants such as investors, brokers etc. Call it a rally in the market.

For example Sensex moves from the levels of 15000 to 16000 in a short span of 14 trading sessions then the trend is referred to as a rally in the momentum of the stocks.In situation of a rally the bulls are said to be very active driving the Index to higher levels.

On the other hand as the word crash suggests a decline or downfall it applies to the Index as well. Just as in a rally the market goes up a in case of a crash the stocks tumble moving the index to lower values. For example the comments such as the Sensex has plunged by 1000 levels in the last few trading sessions from the levels of 15000 suggests presence of a crash where the bears are said to be active.

Bell the Bull says: Coming across new terms in stock markets is pretty evident but for the new investors it is necessary that they understand the terms and follow the markets in the right direction so that they can be aware of what is actually happening in the markets.


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