Accumulation/Distribution [AccDis]

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The Accumulation/Distribution function determines the momentum of a financial data series using the trading volume to assess the significance of daily price movement. Parameters ------------------ Close         The closing price of the security for each given day. High          The high price of the security for each given day. Low           The low price of the security for each given day. Volume      The number of shares of the security that were traded during each given day. Note that while this function is intended for use with these specific values, any values can be used for these parameters, including other price values and averaged prices. Indicator Value ------------------------ The Accumulation/Distribution indicator is similar to the On Balance Volume and the Price and Volume Trend indicators. All of these indicators add or subtract some portion of the trading volume from a cumulative value based on the direction of price movement. When prices increase, the volume is added. When prices decrease, the volume is subtracted. The Accumulation/Distribution momentum indicator determines whether a stock is primarily being bought (accumulated) or sold (distributed) during a trading day. It is based on the closing price relative to the midpoint of the high and low prices for the day. If the closing price is higher than the midpoint, it is assumed that more shares were bought during the day than were sold. The price value is multiplied by the volume and added to the momentum from the previous day. The volume is used to factor in how much of the market was behind the relative price change. Since this is a cumulative indicator, the value at the beginning of the data series is zero and the value associated with each new day is added to the value of the previous day. Note that if the closing price is on the midpoint, the indicator will remain unchanged. Usage ----------- This type of indicator is often significant when it diverges from the current price trend. For example, if prices are rising and the indicator is decreasing, the price will typically begin to decrease since they lack the volume support to maintain the current trend. Note: The Accumulation/Distribution indicator does not use the opening price or previous closing price to track price movements. Instead, it uses the midpoint between the high and low prices for the day to determine whether the closing price is significant relative to the remainder of trading for the day. Therefore, the overall price for the day could be decreasing, but the security could be evaluated as being accumulated at the end of the day if the closing price raised above the midpoint between the high and low prices for the day. Source ------------ This indicator is based on an entry in "Technical Analysis From A To Z" by Steven B. Achelis.