Accumulation/distribution
The Accumulation/Distribution is a momentum
indicator that associates changes in price and volume. The indicator is based on
the premise that the more volume that accompanies a price move, the more
significant the price move. Accumulation/Distribution attempts to confirm
changes in prices by comparing the volume associated with prices. When the
Accumulation/Distribution moves up, it shows that the security is being
accumulated, as most of the volume is associated with upward price movement.
When the indicator moves down, it shows that the security is being distributed,
as most of the volume is associated with downward price movement. Divergences
between the Accumulation/Distribution and the security's price imply a change is
imminent. When a divergence does occur, prices usually change to confirm the
accumulation/distribution. For example, if the indicator is moving up and the
security's price is going down, prices will probably reverse. If the days price
change is positive then the difference in the daily high and low price is added
to the total, and conversely if the daily change is negative then the daily
range is subtracted from the total