ACCUMULATION and DISTRIBUTION

With the DOW THEORY of Charles Dow, the MAIN TRENDS.
PROFESSIONAL INVESTORS adjust their action to each of these 3 PHASES:

ACCUMULATION PHASE.

The best time to buy an asset, usually enjoyed by investors better prepared.
It is the time when the market has assimilated all the negative information that held the downtrend, and is showing signs of reversal to an uptrend.
At this stage we find the PRICE above the Simple Moving Average of 200 periods (MM200) and this above the Simple Moving Average 50 periods (MM50).

PHASE PUBLIC PARTICIPATION.

The stage at which most investors trend followers begin to purchase the asset.
The price engages the trend and occur rapid and significant price rises, with the market to assimilate the new good news.

DISTRIBUTION PHASE.

It appears when newspapers began writing about the substantial increase in the asset gains, the volume of operations and begins to increase public participation becomes even greater. This is where savvy investors entered the active and begin to undo their positions, pocketing the profit.
At this stage we find the Simple Moving Average 50 periods (MM50) above the Simple Moving Average of 200 periods and this up PRICE. (concepts that develop in another post later).