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Breadth Advance/Decline Line

Advance/Decline Line (Breadth) - A/D Line (Breadth) is the oldest one in the sphere of technical analysis. The Advance/Decline Line - Breadth - indicates the number of advancing issues divided by the sum number of declining and advancing issues. The main precondition of volume indicators, which include the Accumulation (Distribution) Line, is that volume is prior to price. Volume depicts the number of shares traded in a definite stock. That is why it is a direct reflection of the capitals moving inside and outside the stock. There will be period of increased volume preceding the move in many cases before a stock advances.

The market is supposed to be strong or "having good breadth" when advancing issues overcome declining issues. If the line breaks out to the upside, one can predict the market increase during upcoming months. New index peaks have also tended to results in the market highs.

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