The Advance/Decline Line (AD Line) is a breadth indicator which is calculated by taking the difference between the number of advancing and declining issues and adding the result to the previous value. It rises when advances exceed declines and falls when declines exceed advances. It’s important to compare Advance/Decline Line plotted for the index with the performance of the actual index. It is used to confirm price trends in major indexes, and can also warn of reversals when divergence occurs.
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