Redistribution or Accumulation, that is the question?!
From the perspective of Wyckoff analysis, both accumulation and redistribution involve price action within a trading range (TR), but they represent vastly different underlying market dynamics:
Accumulation:
Underlying Trend: Accumulation typically occurs at the beginning of an uptrend.
Supply and Demand: Smart money (institutions, experienced traders) are actively buying shares, causing demand to outweigh supply. This pushes the price upward with increasing volume.
Price Action: The price action in an accumulation phase is characterized by testing and absorbing supply (support levels). There may be false breakdowns and narrow price ranges as buying pressure builds.
Redistribution:
Underlying Trend: Redistribution typically occurs within an existing downtrend. It's a pause in the downward movement before a continuation of the downtrend.
Supply and Demand: Smart money is distributing (selling) their holdings, causing supply to outweigh demand. This puts downward pressure on the price, but volume may be lower compared to accumulation.
Price Action: The price action in a redistribution phase may resemble accumulation with testing and absorbing support, but with key differences:
False breakdowns may be weaker and fail to hold.
**Upward movements may be less vigorous and lack confirmation from volume.
Price tends to create lower highs compared to previous rallies.
Distinguishing between the two:
Differentiating between accumulation and redistribution can be crucial for informed trading decisions. Here are some additional points to consider:
Context: Analyze the broader market trend and the stock's specific history.
Volume: While not absolute, accumulation typically sees rising volume, while redistribution may have lower or stagnant volume.
Confirmation: Look for confirmation signals such as breakouts above resistance for accumulation or breakdowns below support for redistribution.
Accumulation:
Underlying Trend: Accumulation typically occurs at the beginning of an uptrend.
Supply and Demand: Smart money (institutions, experienced traders) are actively buying shares, causing demand to outweigh supply. This pushes the price upward with increasing volume.
Price Action: The price action in an accumulation phase is characterized by testing and absorbing supply (support levels). There may be false breakdowns and narrow price ranges as buying pressure builds.
Redistribution:
Underlying Trend: Redistribution typically occurs within an existing downtrend. It's a pause in the downward movement before a continuation of the downtrend.
Supply and Demand: Smart money is distributing (selling) their holdings, causing supply to outweigh demand. This puts downward pressure on the price, but volume may be lower compared to accumulation.
Price Action: The price action in a redistribution phase may resemble accumulation with testing and absorbing support, but with key differences:
False breakdowns may be weaker and fail to hold.
**Upward movements may be less vigorous and lack confirmation from volume.
Price tends to create lower highs compared to previous rallies.
Distinguishing between the two:
Differentiating between accumulation and redistribution can be crucial for informed trading decisions. Here are some additional points to consider:
Context: Analyze the broader market trend and the stock's specific history.
Volume: While not absolute, accumulation typically sees rising volume, while redistribution may have lower or stagnant volume.
Confirmation: Look for confirmation signals such as breakouts above resistance for accumulation or breakdowns below support for redistribution.
Note
HOOD Note
NET Note
ARKK Note
PATH 
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Use the following link to access trading ideas: patreon.com/SniperTraderStocks?utm_medium=unknown&utm_source=join_link&utm_campaign=creatorshare_creator&utm_content=copyLink
Clause de non-responsabilité
Les informations et les publications ne sont pas destinées à être, et ne constituent pas, des conseils ou des recommandations en matière de finance, d'investissement, de trading ou d'autres types de conseils fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.