What is the Accumulation Area? The accumulation area is characterized by mostly sideways stock price motion and is seen by many investors as indicating a potential buying opportunity.
Breaking Down Accumulation Area The accumulation area is important for investors to recognize when making buy and sell decisions. Experienced investors look for patterns indicating a stock is either at a high point, low point or somewhere in between. The goal is to determine if there is momentum in a stock price and in which direction. A stock in the accumulation area may be about to break out. When a stock price doesn't fall below a certain price level, and moves in a sideways range for an extended period, this can be an indication to investors that the stock is being accumulated by investors and as a result will be moving up soon.