Here is the complete sequence so you can see the position of the 'Recovery':


1. Accumulation Phase (Recovery Start)


This is the early recovery phase. After prices drop drastically, the market begins to stabilize (sideways). Here, 'smart money' or large investors start to buy back slowly.



  • Sentiment: Fear begins to turn into uncertainty.


  • Characteristics: Prices no longer make new lows.


2. Participation Phase (Markup)


Prices begin to rise consistently and break through resistance areas. Media starts to cover, and retail investors begin to enter as they see a clear recovery trend.



  • Sentiment: Optimism and excitement.


4. Distribution Phase


Recovery has reached its peak. Here, prices start moving sideways again, but because large investors begin selling their assets to late-entry retail buyers.



  • Sentiment: Euphoria (believing prices will keep rising forever).


4. Decline Phase (Markdown/Capitulation)


Prices fall again. This is the opposite of recovery, where people start "panic selling".