Stock Cycle

The stock cycle is the cycle of a stock’s price through its own bull and bear phase. This usually coincides with the bull and bear phase in the general market.

The four phases are : 1. Accumulation: institutions buy up the stock slowly and the price is directionless 2. Markup: the price of the stock begins an uptrend(usually breaks out of a trading range) 3. Distribution: after a long or short run up, the stock is slowly sold by institutions and major holders, the price is rangebound and directionless again 4. Markdown: the price of the stock begins a downtrend, usually breaking out of a trading range as well

Though this may sound simple on paper, in practice it’s much more difficult to detect and capitalize on the 4 stages.

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