Business Definition for: accumulation area
accumulation area
price range within which buyers accumulate shares of a stock. Technical analysts spot accumulation areas when a stock does not drop below a particular price. Technicians who use the
on-balance volume
method of analysis advise buying stocks that have hit their accumulation area, because the stocks can be expected to attract more buying interest.
See also
distribution area
Related Terms:
price range in which a stock trades for a long time. Sellers who want to avoid pushing the price down will be careful not to sell below this range. accumulation of shares in the same range helps to account for the stock's price stability. Technical analysts consider distribution areas in predicting when stocks may break up or down from that price range.
Referring Terms:
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