Distribution is the mirror of accumulation: a sideways range after an uptrend where large holdings are sold into strength near the highs. The composite operator unloads into eager buyers without collapsing price too soon.
What it looks like
Distribution often opens with a buying climax — a sharp, high-volume surge as the crowd chases the top — followed by a sell-off and repeated tests of the highs. As the range matures, upward pushes fail to extend, revealing that supply is meeting every attempt to rally.
Watch for rallies to the top of the range on weakening volume and reversals on strong volume. When declines within the range begin to look more forceful than the rallies, the balance is tipping toward sellers and a markdown may be approaching.
- Follows an uptrend, often after a climactic surge.
- Price chops sideways as selling meets incoming demand.
- Pushes to resistance lose momentum and volume.
- Late-stage declines widen while rallies narrow.
Distribution is a range where buying is absorbed near the highs — the quiet groundwork for a later markdown.
Distribution and re-accumulation can look almost identical in real time, and a suspected top may simply resolve upward. Never assume a range is distribution until a sign of weakness and a failed test confirm supply has won.