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Heavy Institutional Distribution

Overview​

The Heavy Institutional Distribution profile identifies stocks showing persistent selling behavior by institutions, based on either an extremely negative Accumulation/Distribution Score (≤ -3) or recent signs of institutional distribution in the past 10 trading days.

These conditions suggest smart money is exiting positions, potentially due to deteriorating fundamentals, technical weakness, or upcoming negative catalysts. This profile is used to surface downside setups or to avoid names under stealth liquidation.

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This profile updates in real time and filters for stocks experiencing strong distribution pressure from institutions, based on both short- and mid-term activity windows.

Strategy Focus​

  • Detect institutional exit patterns to avoid or short weakened names
  • Monitor stocks under high-volume distribution pressure
  • Spot early sell signals before breakdowns occur
  • Use as a risk management layer to filter out names under smart money selling
  • Combine with AI metrics to isolate technically clean downside setups
  • Evaluate stocks with poor structural support and selling flow

Filters Applied​

  • Liquidity Rating > 70, ATRP 14D ≥ 0.5, Volatility (Month) ≥ 1: Filters for tradable and volatile names to allow short setups or avoidance
  • Accum/Dist Score ≤ -3 OR Recent Institutional Action = Inst Selling: Captures names under persistent or recent institutional selling behavior

Metrics Used​

AI Strategy and Setup Quality​

  • AI - Alpha Strategy: Detects whether the stock has a short-biased or weak structure based on real-time behavior
  • AI - Risk/Reward: Evaluates downside opportunity relative to stop-loss level — high-quality setups typically show asymmetric risk
  • AI - Path to Target: Reveals how many support zones remain — distributed names often have clear downside paths

Volume, Liquidity, and Activity​

  • Volume All Hours: Confirms strong participation during the session — institutional exits are rarely quiet
  • Relative Volume: Surges in volume often accompany heavy distribution, flagging urgency or forced liquidation
  • Dollar Volume Rank: Sorts by capital flow — lower-ranked names with high selling may signal stealth exits in less visible stocks

Price Action and Structural Signals​

  • Change Pre Market (%), Change From Close (%): Capture intraday or early weakness tied to recent selling behavior
  • RSI Divergence 14 Days: Flags overextension or trend fatigue — useful when combined with distribution pressure
  • Universal Pattern Detection: Surfaces breakdown formations, failed retests, or reversal tops that confirm selling
  • Tight Range: Suggests breakdowns may be imminent after low-volatility setups begin to unwind

Sector and Theme Context​

  • Industry Rating 1 Day, Theme Rating 1 Day: Show if weakness is isolated or part of broader sector rotation out
  • Industry Rating 1 Year, Theme Rating 1 Year: Contextualize whether the name is exiting from long-term leadership
  • Relative Strength 1 Day, Relative Strength 1 Year: Confirm whether the stock is weak in both short- and long-term views

Fundamentals and Timing​

  • Recent Institutional Action: Detects near-term distribution based on price-volume dynamics — especially when combined with weak chart structure
  • Accumulation/Distribution Score: A composite multi-week indicator of institutional exit pressure — scores ≤ -3 are extreme
  • MarketAlpha Rating: Used to evaluate whether distribution is occurring in structurally weak names
  • EPS Rating, Sales Rating, Profit Rating: Can remain high temporarily — distribution in these names often precedes reversion
  • 52 Week High (%): Measures distance from recent highs — often wide in names being aggressively sold
  • Next Earnings In Days: Indicates if selling pressure is linked to expected negative earnings or fundamental catalysts

Default Sorting Logic​

Results are sorted by Dollar Volume Rank (ascending) to surface the most visible, liquid names under institutional distribution.

Practical Use Cases​

  • Avoid stocks experiencing persistent institutional exits
  • Screen for potential short candidates with smart money pressure
  • Track early breakdown setups in high-volume sell environments
  • Confirm failed setups or reversal structures using selling pressure metrics
  • Add as a downside risk overlay in long-biased watchlists
  • Use to refine themes or industries with broad-based distribution