Entering text into the input field will update the search result below

What Does Bullish Mean Regarding Stocks?

Updated: Mar. 31, 2023By: Kimberlee Leonard

Bullish refers to the sentiment that the market, a sector, or particular stock will rise in price. It’s an expectation for positively trending security prices. Typically, a larger portion of market participants is bullish than bearish, although that may not be the case during certain periods.

bull and chart for business or bull market trader concept

niphon/iStock via Getty Images

What Is A Bull Investor?

Bullish investors are optimistic and confident about the current state of when it comes to purchasing equities. They believe that securities will rise in price. They feel this way either due to business fundamentals, valuations, technical reasons, or a combination thereof.

Tip: A bullish investor is optimistic on security values, while a bearish investor is pessimistic on security values.

What Is A Bull Market?

A bull market describes a market that is rising in nature. The term can be used to describe various tradeable markets including bonds, real estate, currencies, and commodities, but is most commonly used to describe a rising stock market.

Bull markets can last for months or years. They are the opposite of a bear market where prices are dropping. Bear markets can interrupt bull markets for extended periods of time.

Where a bear market is marked by a 20% decline in prices, a bull market is confirmed by a 20% increase from the low point of a recent bear market. Bull markets are indicative of a strong or strengthening economy, high corporate earnings, and investors' general feelings that putting money in the market is a good thing.

Important: By definition, a bull market and bear market cannot occur at the same time.

What Is A Bullish Stock Perspective?

A bullish stock perspective simply means that a certain investor feels that a certain stock price will rise. There can be a lot of reasons for this sentiment. The investor could be seeing positive business trends such as the launch of new products or new strategies, or be optimistic based mostly on current valuation. The investor may also be assessing technical analysis of the stock in becoming bullish.

Whatever the reason for feeling bullish on a stock, an investor with a bullish stock perspective feels that it is a good time to buy the stock. They may wait for certain signals to occur prior to actually buying, but their overall feeling is positive about the investment security. When an investor has an overall pessimistic feeling about a security, they are said to be bearish.

What Are Bullish Stock Patterns?

A bullish stock pattern is a technical read of the stock that may indicate an uptrend. Stock patterns are specific formations created by the movement of the stock price during trading periods. Patterns help to identify positive or negative trends, helping investors determine the signals to buy and sell.

Let's look at five common bullish stock patterns:

  • Double bottom: Resembles a W on the chart that describes three peaks at the resistance level. This pattern anticipates the stock breaking through the resistance level and continuing upwards.

  • Ascending triangle: This is where the resistance levels remain the same as the stock trades with higher support levels causing an upward trend.

  • Cup and handle: The cup resembles a U followed by the slight downward drift making up the handle. The thought is that the stock will break out above the handle and continue up.

  • Bull flag: The stock has a sharp upward trend making the pole followed by a flag that trades at similar or equal support and resistance levels.

  • Bullish engulfing candle: Shows that the day's opening is lower than the previous day's and the close is higher than the previous day's close.

Bullish Vs. Bearish Stock Perspectives

In the stock market, there are always going to be investors with bullish and bearish viewpoints. This is what makes a market. The two groups simply have the opposite perspectives. Where the bull foresees a rising trend, the bear has a bleaker outlook.

Sentiment itself impacts stocks market. If the majority of investors are bullish and buying stocks, markets tend to rise. If the majority of investors are bearish, markets may fall.

Bottom Line

Being bullish on stocks means that an investor thinks the price of a security will rise and continue on an upward trend for a period of time. That assessment may be based on technical or fundamental analysis of a stock, sector, or index. Bulls want to buy more stock and add to positions when they feel the trend will continue upwards.

This article was written by

Kimberlee Leonard profile picture
Kimberlee brings professional experience to her writing. She started as a FINRA Series 7 broker and later transitioned her career into owning an insurance agency and preparing taxes.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments disabled for this article
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.