Accumulation and Distribution

Syndicate traders are very good at deciding which of the listed shares are worth buying, and which are best

left alone. If they decide to buy into a stock, they are not going to go about it in a haphazard or half-hearted

fashion. They will first plan and then launch, with military precision, a co-ordinated campaign to acquire

the stock – this is referred to as accumulation. Similarly, a co-ordinated approach to selling stock is

referred to as distribution.
 

Accumulation

To accumulate means to buy as much of the stock as possible, without significantly putting the price

up against your own buying, until there are few, or no more shares available at the price level you have

been buying at. This buying usually happens after a bear move has taken place in the stock market

(which will be reflected by looking at the Index).

To the syndicate trader, the lower prices now look attractive. Not all of the issued stock can be

accumulated straight away, since most of the stock is tied up. For example, banks retain stock to cover

loans, and directors retain stock to keep control in their company. It is the floating supply that the

syndicate traders are after.
 

Once most of the stock has been removed from the hands of other traders (ordinary private

individuals), there will be little, or no stock left to sell into a mark-up in price (which would normally

cause the price to drop). At this point of ‘critical mass’, the resistance to higher prices has been

removed from the market. If accumulation has taken place in lots of other stocks, by many other

professionals, at a similar time (because market conditions are right), we have the makings of a bull

market. Once a bullish move starts, it will continue without resistance, as the supply has now been

removed from the market.

Distribution

At the potential top of a bull market, many professional traders will be looking to sell stock bought at lower

levels to take profits. Most of these traders will place large orders to sell, not at the current price available,

but at a specified price range. Any selling has to be absorbed by the market-makers, who have to create a

'market’. Some sell orders will be filled immediately, some go, figuratively, 'onto the books‘. The marketmakers

in turn have to resell, which has to be accomplished without putting the price down against their

own, or other traders’ selling. This process is known as distribution, and it will normally take some time

for the process to complete.
 

In the early stages of distribution, if the selling is so great that prices are forced down, the selling will stop

and the price will be supported, which gives the market-maker, and other traders, the chance to sell more

stock on the next wave up. Once the professionals have sold most of their holdings, a bear market starts,

because markets tend to fall without professional support.

所有跟帖： 

• 谢谢，就是不是解释了TA上的support和resistence？ -ah39- ♂ (0 bytes) () 08/04/2013 postreply 19:07:33

• ya, 差不多！其实很简单 -TA_Junkie- ♂ (281 bytes) () 08/05/2013 postreply 03:54:24