Accumulation / Distribution Indicator

A/D = SUM (((Close — Low)-(High — Close)) * Volume / (High — Low) , N )

Accumulation / Distribution (A/D) indicator is similar in most aspects to the On Balance Volume (OBV) indicator but it is more complex.

Accumulation / Distribution indicator signals:

• if a new price high is confirmed by a new Accumulation / Distribution (A/D) indicator high this means that the bullish trend is strong;
• if a new price bottom is confirmed by a new Accumulation / Distribution (A/D) bottom this means that the bearish trend is strong;
• bullish divergence warns of the weakness of the uptrend;
• bearish convergence warns of the weakness of the downtrend;
• breakout of the trend line drawn on Accumulation / Distribution (A/D) indicator warns of the high possibility of the breakout of the trend line on the price chart.