Technical Analysis, Studies, Indicators:
Advance Decline
Volume Oscillator
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The A-D volume oscillator is widely used to assess
market breadth and as an indicator for market strength. When advancing issues
outpace declining issues, the advance-decline line moves higher. Conversely, the
A-D line moves lower, when the number of declining issues outweighs the number
of advancing issues. By studying the A-D oscillator, you can thus determine the
overall health of the market.
We are the only
source of advance decline indicators for U.S. indexes and exchanges on daily and
intraday level which allows to use it in the
S&P 500,
Russell 2000 and other
indexes technical analysis.
The formula for calculating the
advance-decline volume oscillator is simple:
A-D Volume Oscillator = Advance Volume -
Decline Volume
The formula for calculating the
advance-decline momentum volume oscillator is:
A-D Momentum Volume Oscillator = Advance
Momentum Volume -
Decline Momentum Volume
In the bottom pane of the chart, you will see a green shaded
area, where the advances volume exceeds the declines volume. Where the declines
volume surpasses the advances volume, you will see a red shaded area. We have
added a volume moving average (VMA) that outlines these areas. The VMA turns red
or green depending on whether we have a positive or a negative A-D oscillator. Various
settings for the VMA could be applied, giving an analyst the ability to
determine the best fit for each particular timeframe. The VMA is one of the
advantages of the A-D volume oscillator.
The A-D volume oscillator has a horizontal scale from which you can
read the advances and declines volume (in billions of shares).
Chart 1. NASDAQ 100 30-day
intraday (one bar = 30 min)
Advance-Decline Momentum Volume Oscillator
Chart 2. NASDAQ 100 60-day
intraday (one bar = 1 hour)
Advance-Decline Momentum Volume Oscillator
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