B

Glossary · PSX term

Bull trap.

A bull trap is a false rally that lures buyers in before the price resumes falling.

Definition

A stock or index appears to break higher, drawing in optimistic buyers, then reverses and traps them in losses. It is a reminder that one strong move does not confirm a lasting trend.

Worked example

A weak stock jumping on a rumour, attracting buyers, then sliding again, is a bull trap.

Related on PSX Clarity

Fear of missing out (FOMO)

Market sentiment

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