Stealth Accumulation

Note:  The historical stock examples given below are for EDUCATIONAL USE ONLY.  They ARE NOT to be used to make buy/sell decisions in today's market.  For more information, please read the HSR Terms of Use.

Description

Price range contracts AND price fails to significantly decline in relation to the heavy volume that's traded during the week.

Behavior Notes:

1. Price always closes lower (in the bottom half of the range) and volume exceeds the prior week.  Because of these facts, Stealth Accumulation looks like distribution.
2. Comparison to a past week of distribution with range expansion is important.  In many cases, it's best to use the prior week (if possible).  This helps you recognize that the price decline is not responding to heavy volume like the prior week.

What you need to know

Stealth Accumulation represents a sign of support for a stock because price range decreases AND price is unable to fall much compared to the volume increase for the week.  When price falls and range contracts on an increase in volume, you have to consider accumulation.

Tips:

1. Sometimes it helps to use a Daily Chart to identify Stealth Accumulation.  A Daily Chart can help you spot signs of support during the week that you suspect Stealth Accumulation (please see chart example 1B below).
2. Stealth Accumulation may occur within a PDW, which is something to note.

Historical Stock Chart Examples 1A-1C:  Posco ADS (PKX) 2006

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