risk
intermediate
Distribution Day
A down day on above-average volume — a tell that large holders are quietly selling.
A distribution day is a session where a stock (or the broader market) closes meaningfully lower on volume that's above its 50-day average.
The logic: a normal pullback in a healthy uptrend happens on shrinking volume — fewer sellers, just routine profit-taking. But when down-days arrive with expanding volume, it suggests large institutional holders are quietly distributing their position to retail buyers. Multiple distribution days in a short window is a warning that the trend may be running out of steam.
The rule of thumb
- 1-2 distribution days in 25 sessions: normal.
- 3-4 distribution days: caution; the trend is weakening.
- 5+ distribution days: high probability the uptrend is ending. Tighten stops.
Swing Edge counts distribution days over the last 25 sessions and uses the count as both a per-stock risk signal and a market-level breadth signal.