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Strategies & Market Trends : ZITL, best stock for traders

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To: blast_investor who wrote (17)3/16/1997 3:42:00 PM
From: Craig Richards   of 26
 
Accumulation/Distribution is, IMO, a more refined price/volume indicator than OBV. A/D changes each day by:
((Close - Open)/(High - Low))* Volume.

So if prices are unchanged between open and close, A/D is unchanged. If prices rise, then the proportion of the rise compared to the total trading range for the day is added to the cumulative A/D. If prices fall, then the proportion of the fall compared to the total trading range for the day is subtracted from the cumulative A/D. This is more sensitive to price swings than OBV. OBV treats a change of 1/8 the same as a change of 5. A/D is affected more by larger price changes, and less by smaller price changes.

Note that both A/D and OBV have been relatively flat in the last few weeks because volume has been relatively low.
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