accumulation area

Accumulation area

A range within which a buyer accumulates shares of a stock. See: On-balance volume and distribution area.

Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Accumulation Area

A price range in which buyers buy large numbers of shares of a stock. One can identify an accumulation area if a stock only rarely falls below a certain price. On-balance Volume Method analysts use accumulation areas to recommend stock purchases because they believe such stocks will attract large numbers of buyers. See also: Distribution area.

Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

accumulation area

In technical analysis, a rectangular-shaped chart formation produced when insiders and other knowledgeable investors purchase shares of stock from the public and characterized by little price movement but relatively heavy volume. If an accumulation area can be identified, it indicates a time to buy. Compare distribution area. See also rectangle.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.