Advance-Decline Line

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Advance-Decline Line

As of the close last Friday, 9/3/2010

charts are courtesy of Metastock

Description: The Advance-Decline Line is calculated by taking the difference between the number of advancing issues and the number of declining issues. If there are more advances than declines, the AD number for that day is positive. If there are more declines than advances, the AD line for that day is negative. The Advance-Decline Line tells us whether or not the broader universe of all the stocks traded in the PSE is advancing in line with the Phisix. As long as the AD line is advancing with the Phisix, the breadth or health of the market is good. The danger appears when the AD line begins to diverge from the Phisix. Historically, the AD line peaks out well ahead of the market averages, which is why it's watched so closely.