There are few technical indicators in the market rally. The first one is Oscillators, it happens when there is an overbought condition. Then, trend indicators start to shift to uptrend indications. It could lead to the display of price action on high. Other indications are strong volume and weak volume with higher lows. Thus, it can approach price resistance levels.
Causes of rallies could be many. Short-term rallies for instance happen due to the sudden short news or event. This could lead to the imbalance between supply and demand. The trigger of short-term rally could also be from sizable buying activity in a particular stock or sector done by the large fund. Moreover, action like popular brand product launch and introduction, could also lead to short-term market rally. The best epitome is the iPhone launch. This product launches perennially, so the stock benefits from the market rally in a few months from the launching of new products.
The long term rally is quite different. Literally, the long term rally is the outcome of longer impact like government tax or fiscal policy. Others like business regulation and interest rates are also indicators of the long term rally. There are also longer shifts based on the economic data announcement. The announcement could signal positive changes in business as well as economic cycles. The longer lasting impact could trigger some shifts in the large sector and investment capital.
The lowering of interest rates for instance could affect investor’s shift from fixed income instruments to equities. Therefore, it could inflict conditions for a rally in equities markets.