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accumulation area

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Financial Dictionary

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 by David L. Scott.
Copyright © 2003. Published by Houghton Mifflin.
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