The A/D Volume Line weighs breadth by trading volume, so it shows where the money flows rather than how many stocks move. A rising line means more shares change hands in advancing stocks than in declining ones, which confirms an uptrend. When the index reaches a new high but the A/D Volume Line does not, buying volume is drying up, a bearish divergence; a higher low in the line while the index makes a lower low is a bullish divergence. Comparing it with the regular A/D Line helps too: if both rise, the advance is broad and backed by volume.
The charts above show the Advance/Decline Volume Line under the price of 24 stock indexes, from the S&P 500, Nasdaq 100 and Russell 2000 to the FTSE 100, DAX and Nifty 50, so you can compare breadth across markets at a glance. Click a chart to open a larger version.
The Advance/Decline Volume Line is a running total of the volume of advancing stocks minus the volume of declining stocks in an index. It shows whether trading volume supports the market trend.
Each day, the total volume of declining stocks is subtracted from the total volume of advancing stocks, and the result is added to the previous value of the line.
The A/D Line counts advancing and declining stocks, while the A/D Volume Line adds up their volume. A stock with heavy volume has more weight in the volume line, so it reflects the money behind a move.
If the index makes a new high while the A/D Volume Line fails to, less volume is going into rising stocks and the rally may be weakening. A rising line during an index decline points to accumulation.
Yes. In the Formula Screener, advdecvol is the A/D Volume Line. For example, (advdecvol > advdecvol@1)@nasdaq and price ca sma(50) finds stocks crossing above their 50-day SMA while Nasdaq volume breadth is rising.
