Bull Trap
A bull trap is a chart pattern in which the price of a stock, index, or F&O instrument moves above a recognised resistance level or prior swing high, suggesting a breakout, but then fails to sustain and reverses back below that level. Traders who treated the move above resistance as a genuine upside breakout and bought are left "trapped" as the price falls back into or below the prior range. It is a common name for one type of false breakout on the NSE cash and derivatives markets.
Also called: Bull trap, bull-trap, false breakout, false bullish breakout, failed breakout, fake breakout, false upside breakout
How it is read
A bull trap is usually identified after the fact: the price pokes above resistance, often on a candle close or intraday spike, and then closes back below the same level, frequently on rising volume during the reversal. Observers commonly read it as a sign that demand above resistance was not strong enough to hold the breakout, and the broken-out level is often watched as resistance again afterward. The pattern is described purely as a structural reading of price and volume behaviour around a known level, not as a signal of what price will do next.
What it does not tell you
A bull trap can only be confirmed in hindsight; while the price is above resistance there is no certain way to distinguish a genuine breakout from a trap that will later fail. The label does not tell you how far price will fall, how long the reversal will last, or whether the level will be retested and broken cleanly later. It is easy to mislabel ordinary intraday volatility, a brief overshoot, or a normal pullback after a valid breakout as a bull trap, and the pattern says nothing about the underlying fundamentals or news driving the move.
Related terms
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