Investing In Stocks | Understand the market cycle to plan your investments better
When Investing In Stocks, we can take note of the 4 stages of the market that repeatedly show up on the chart. At Right Line Trading, Mark Sachs uses both Technical Analysis and Fundamental Analysis to measure this cyclical behavior.
Please review: we have four stages: Accumulation – Uptrend – Distribution – Downtrend. After a decline, sellers slowly switch to buyers. As more buyers enter the market, the market becomes stable. This period is also known as Consolidation, where price moves hesitantly in both directions. Then the Uptrend happens when positive news about the Investing In Stocks is released, which prompts everyone to buy. The Uptrend continues until no one wants to pull the price up further or when it reaches resistance.
The Distribution period is similar to the Accumulation. The climax is over, and investors will need time to review the market to consider their next move. The market cools down, another Consolidation takes place. After that, the Downtrend occurs. As price plummets, people sell their stocks in a panic, which drives the value down until no one wants to sell anymore or until it reaches a Support level. The Market Cycle has now finished and got ready for its next Accumulation period. Learn More