Accumulation Distribution - Technical IndicatorsAccumulation/Distribution is a momentum market technical indicator based on the logic that when a stock has a significant price move, more volume is accompanying this move. Accumulation/Distribution is based on supply and demand principle. Accumulation/Distribution is very similar to On Balance Volume. When this indicator is increasing it shows that more volume is accompanying positive price changes. When Accumulation/Distribution is decreasing it shows that most of the trading volume is associated with a negative price trend.
When Accumulation/Distribution moves upward it basically shows that the stock has being accumulated (bought), when Accumulation/Distribution moves downward it shows that the stock is being distributed (sold). A confirmed change in Accumulation/Distribution form a downward direction into an upward can be considered as a long term buy signal, similar a change from an upward trend into a downward can be though of as a sell signal.
Accumulation/Distribution is calculated using the following formula:
For the first data point this sum is equal to zero, then Accumulation/Distribution is consecutively added to the previous function value.
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