Accumulation/distribution
A volume-weighted line based on where the close falls within the day's high-low range, meant to show whether a security is being accumulated (bought) or distributed (sold) over time.
What the numbers mean
Nothing to set — this one is read straight off price or volume, with no lookback period or multiplier behind it.
How it is used
Used mainly for divergence: a rising A/D line while price stalls suggests quiet buying; a falling line during a rally suggests distribution into strength.
- Rising line while price stalls → quiet accumulation
- Falling line during a rally → distribution into strength
- Line confirming a breakout → the move has money behind it
How it relates to everything else
A/D is the foundation for Chaikin Money Flow (which averages it over a window) and the Chaikin Oscillator (which takes a MACD of it), so all three tell a consistent story at different speeds. Its blind spot is gaps: a security can gap down heavily and still register accumulation if it closes near the top of the new, lower range.
- A/D → CMF → Chaikin Oscillator: raw, averaged, then differenced
- Ignores gaps entirely, which is its main weakness
- Read against OBV; disagreement between them is informative
What to watch for
Because it looks only at where the close sits within each bar's range, it ignores gaps entirely — a security can gap down heavily and still register accumulation if it closes near the top of the new, lower range.