Market breadth
New high and new lows
Market breadth analysis is a based upon simple counts of the number stock going up or down in price establishing new price or lows.
Today's software technology which is capable of so much more than merely counting pluses and minuses.
When most stocks are participating in a general price advance, the market is said to have good breadth. If the blue chip averages, such as nifty and sensex stocks are advancing, but the majority of stocks declining has bad breadth.
The advance decline line is the simplest of all breadth measures.
Advance decline ratio
To calculate the advance decline ratio, divided by the number of advancing shares by the number of declining shares. The advance decline ratio can be calculated for various time period, such as one day, one week or one month.
When this improved advance decline line is in an established up trend the odds are that stocks are in a bull market. When the improved advance decline is in a down trend, the probability of a major down trend is greater.
Market analyst have long held that when more stocks are making new Highs than are making new lows, the market is in primary up trend and further advances should ensue. If new lows predominate, a bearish market climate is said to exist while there some truth to this basic hypothesis, the forecasting value of highs and lows has been greatly exaggerated.
A low advance decline ratio can indicate an oversold market, while a high advance decline ratio can indicate over bought market. Thus the A/D ratio can provide signed that the market is about to change direction. Which ratio will never have a negative value traders can use the following values for estimating the trend of market.
A/D ratio between 0 and 1 bearish to choppy
A/D ratio 1.25. Bullish.
A/D ratio above . 2 extremely bullish.
Trix indicator
The technical chart tool of trix indicate the advance decline line, which indicator consist of a single line, which fluctuate below and above A zero level.
When we need to get a long signal from A/D tool, we will first need to see the trix above the zero level in order to go long.
If we get a short signal from the A/D , we will first need to see the trix line below the zero level in order to go short.
Market breadth analysis is a based upon simple counts of the number stock going up or down in price establishing new price or lows.
Today's software technology which is capable of so much more than merely counting pluses and minuses.
When most stocks are participating in a general price advance, the market is said to have good breadth. If the blue chip averages, such as nifty and sensex stocks are advancing, but the majority of stocks declining has bad breadth.
The advance decline line is the simplest of all breadth measures.
Advance decline ratio
To calculate the advance decline ratio, divided by the number of advancing shares by the number of declining shares. The advance decline ratio can be calculated for various time period, such as one day, one week or one month.
When this improved advance decline line is in an established up trend the odds are that stocks are in a bull market. When the improved advance decline is in a down trend, the probability of a major down trend is greater.
Market analyst have long held that when more stocks are making new Highs than are making new lows, the market is in primary up trend and further advances should ensue. If new lows predominate, a bearish market climate is said to exist while there some truth to this basic hypothesis, the forecasting value of highs and lows has been greatly exaggerated.
A low advance decline ratio can indicate an oversold market, while a high advance decline ratio can indicate over bought market. Thus the A/D ratio can provide signed that the market is about to change direction. Which ratio will never have a negative value traders can use the following values for estimating the trend of market.
A/D ratio between 0 and 1 bearish to choppy
A/D ratio 1.25. Bullish.
A/D ratio above . 2 extremely bullish.
Trix indicator
The technical chart tool of trix indicate the advance decline line, which indicator consist of a single line, which fluctuate below and above A zero level.
When we need to get a long signal from A/D tool, we will first need to see the trix above the zero level in order to go long.
If we get a short signal from the A/D , we will first need to see the trix line below the zero level in order to go short.
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