How To Construct The Advance/Decline Line

The A/D Line = (ADI - DCI) + IND

Where:

ADI = The number of Advancing Issues
DCI = The number of Declining Issues
IND = The value of the indicator yesterday

The A/D Line is calculated by subtracting the number of stocks which declined in price for the day, from the number of stocks that advanced, and then adding this value to a cumulative total.

For example: If on day #1 there were 700 stocks that advanced, while 300 declined, the value of the A/D Line would be +400. If the next day 400 stocks advanced while 600 declined (net change of 200), the new value of the A/D Line would be +200 (+400 previous value, plus net change of -200 = +200).

You can begin an A/D Line using any starting number (even zero). The numeric
value of the A/D Line is of little importance. What is important is both the slope and pattern of the A/D Line.

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