Bearing Fruits- More Lemon?, page-153

Here's a lesson for you:

How To Spot Accumulation

The long-term investor should always be searching for patterns of accumulation as a source of high returns on investment. Accumulation takes place when stock is purchased by knowledgeable long-term investors who understand the long-term value characteristics of the stock. The purchase of the stock by short-term traders and speculators does not qualify as long-term accumulation.

The process of accumulation usually shows up as an extended period of sideways movement. This is a period when there is equilibrium between supply and demand for the stock. It actually results in a long period of dullness. The stock is said to be moving from weak hands to strong hands.

The element of dullness is a very important aspect of accumulation. Speculation is usually driven by excitement, so the dullness assures that the stock is being bought by long term value oriented investors rather than speculators. If the accumulation is taking place after a major decline in price, the dullness will convince the holders with losses in the stock to sell and take the loss for tax purposes.

Keep smiling....