Dead Cat Bounce is an investment term that refers to a temporary rise in the price of a stock or other asset during a long period of decline. In an investment context, a Dead Cat Bounce is considered a “deceptive rally”.

This phenomenon can tempt investors to invest their money into troubled companies. Technically, a Dead Cat Bounce can only be identified after this phenomenon has occurred. “Bounce” itself refers to a short-term price increase followed by a decline. The second drop brings the stock price to a new low. Until the second drop occurs, there is no way to tell if the rise in the stock price is a Dead Cat Bounce or the start of a sustained recovery in the stock's value.