Accumulation/distribution index
     is a technical analysis indicator intended to relate price and volume in the stock market.

    Contents

    Formula

     CLV = { (close - low) - (high - close) over high - low }

    This ranges from -1 when the close is the low of the day, to +1 when it’s the high. For instance if the close is 3/4 the way up the range then CLV is +0.5. The accumulation/distribution index adds up volume multiplied by the CLV factor, i.e.

     accdist = accdist_{prev} + volume times CLV

    The starting point for the acc/dist total, i.e. the zero point, is arbitrary, only the shape of the resulting indicator is used, not the actual level of the total.

    The name accumulation/distribution comes from the idea that during accumulation buyers are in control and the price will be bid up through the day, or will make a recovery if sold down, in either case more often finishing near the day’s high than the low. The opposite applies during distribution.

    The accumulation/distribution index is similar to on balance volume, but acc/dist is based on the close within the day’s range, instead of the close-to-close up or down that the latter uses.

    Chaikin oscillator

    A Chaikin oscillator is formed by subtracting a 10-day exponential moving average from a 3-day exponential moving average of the accumulation/distribution index. Being an indicator of an indicator, it can give various sell or buy signals, depending on the context and other indicators.

    Similar indicators

    Other Price × Volume indicators:

    • Dimensional analysis – explains why volume and price are multiplied (not divided) in such indicators

    This article uses material from the Wikipedia article accumulation/distribution index, which is released under the Creative Commons Attribution-Share-Alike License 3.0.


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