What is the distribution phase of a stock market?

The distribution phase follows the markup phase and signals the transition from a bull to bear market. During this phase, stock prices start to level off and decline as investor optimism fades and selling activity picks up. With decreased demand, prices steadily fall as more investors look to sell and take profits rather than buy.

What is a distribution phase?

The distribution phase is an emotional time for the markets, as investors are gripped by periods of complete fear interspersed with hope and greed as the market appears at times to be taking off again. Valuations are extreme in many stocks and value investors have long been sitting on the sidelines.

How many phases are there in the stock market cycle?

There are four phases in the stock market cycle as follows: 1. The Accumulation Phase This phase of the stock market can apply to an individual stock or the market as a whole. As the name suggests this phase does not have a clear trend and is a period of agglomeration.