$NASDAQ 100(NDX)$ The advance/decline index is a market breadth indicator that represents the cumulative difference between the number of advancing and declining stocks within a given index. A rising A/D index value suggests that the market is gaining momentum, whereas a falling value suggests that the market may be losing momentum.
The advance/decline Index is also called the advance/decline line or the A/D index or line. It is used to help confirm the current stock index trend, or can forewarn stock index reversals when the A/D index diverges with the stock index direction.
- A rising A/D index helps confirm a rising stock index and shows strength since more stocks are rising than falling.
- A falling A/D index helps confirm a falling stock index. This shows weakness since more stocks are falling than rising.
- A rising stock index with a falling advance/decline is a bearish divergence and indicates that the stock market rise is losing steam since fewer stocks are participating in the rise.
- A falling stock index with a rising A/D line is bullish divergence and indicates the stock market could rise as more stocks are starting to move up.
p.s Please use NCFI （stocks above 50day average） and NCTW （stocks above 20day average） to double confirm it.
Comments