The Three Stages of Market Participation Cycle

The Three Stages of Market Participation Cycle

As per the market participation cycle there are three stages categorically

1. The Accumulation

This is stage when some smart investors are actively buying the shares,but the stock price doesn't change much because these buys are very less in number hence the demand is less than the supply,

2.The Public Participation 

This occurs when the trend followers and chartist investors participate after seeing the consolidation in the prices.The demand starts increasing and hence the price too starts increasing by seeing more participation.

   

3. The Distribution 

This phase triggers when speculation occurs. At this point, the investors begin to distribute their holdings to the market.The supply becomes more than the demand and leading to fall in the prices.

By looking at the updated chart of  NIFTY it seems we have now entered in the Accumulation Stage of market participation cycle.