Definition
Accumulation is a campaign after a decline in which professional interests absorb available supply. Selling climaxes, stopping volume, springs, tests, and no-supply bars can appear before markup.
Market psychology
Pessimistic holders sell to stronger interests while the market builds a cause for a later advance.
Recognition rules
- A meaningful decline precedes the range
- Selling pressure is absorbed near support
- Downside breaks fail and tests show less supply
- Strength eventually carries price above resistance
Common mistakes
- Calling every base accumulation
- Ignoring redistribution and continued weakness
Teaching example
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Read a text alternative
Panic supply is absorbed near the end of a decline. The close off the low and immediate response are the evidence; high volume alone would not be enough.
- Market phase
- Accumulation
- Pattern
- Selling Climax
- Timeframe
- D1
What evidence supports accumulation?
Demand must absorb selling and later tests should show that supply has diminished.