AD Line Cumulative

The AD Line Cumulative is a market indicator used to assess the number of securities participating in the rise or fall of a market.

For a given market, this AD-Line is calculated by adding to the previous day's value the difference between the number of advancing and declining securities each day.

Calculation Method

AD-Line Cumulative = (Number of advancing securities - Number of declining securities) + AD-Line Cumulative from the previous day

Example

Interpretation

This indicator is generally used to study divergences relative to a market index such as the CAC 40.
For example, over a given period:

• If the market index is rising while the AD Line Cumulative is falling, this suggests that the market is weak, thus a "Bear" warning or even a precursor sign of reversal.
• Conversely, if the market index is falling while the AD Line Cumulative is rising, this suggests that the market is strong, thus a "Bull" warning or even a precursor sign of reversal.

Market Index	AD Line Cumulative	Interpretation
Rising	Falling	"Bear"
Near previous peak	Well below the corresponding peak	"Bear"
Near previous peak	Well above the corresponding peak	"Bull"
Falling	Rising	"Bull"
Near previous trough	Well above the corresponding trough	"Bull"
Near previous trough	Well below the corresponding trough	"Bear"