Stock Questions, What is a Accumulation Day?

What does it mean when the market or a particular stock has an accumulation day?

To understand an accumulation day investors first must grasp the concept of daily volume, which is the total number of shares traded in a given day for a particular stock. An Accumulation day is when a stock closes higher in both price and daily volume than the previous day.

Break down the word accumulation and accumulate is left behind, which is means to add more. When stock XYZ finishes the day on a positive note with more investors trading shares than the day prior this is a positive sign for the bulls that the stock wants to continue to move up. Simply put, the greater the volume increase and the greater the price increase, then the better the accumulation day overall.

(Fun Fact: Mutual Funds and investors alike utilize what are known as Accumulation Plans to add to overall positions in different holdings. These plans are very commonly seen in retirement accounts such as a 401k.)

Have a Stock Question you want answered? Ask it on the stock forum and it may just be posted live on the blog .

Discuss this post in the StockTradingToGo Forum or email us.

Subscribe To StockTradingToGo.com