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Advancing and Declining Issues
(Indicators based on the "advances" and "declines" concept)
Description: technical analysis of advance/decline issues for index trading. An example of the S&P 500 index chart with advance/decline issues (stocks) data.
Below you may see some quotes from the "Advance/Decline Issues" article from the tutorial on the MarketVolume's website.
"...The term 'declines' represents a cumulative (i.e.,
running) total of the number of stocks (issues) that have fallen in price
compared to their close on the previous trading day... Conversely, the term
'advances' refers to a cumulative (i.e., running) total of the number of stocks
that have risen in price compared to their close on the previous trading day...
...Advances and declines are used as a measure (indicator) of market strength or
weakness...
...Intraday charts provide
more detail and allow you to monitor actual changes in the number (and volume)
of declining and advancing issues - in real-time. This gives you an instant
snapshot of any changes in the market sentiment, exactly as they unfold..."
Chart 1. S&P 500 5-day intraday (one bar = 15 min)
Advancing and declining issues
...In technical analysis, advances and declines data are
used to assess 'market breadth'. Looking at the chart above, a technical analyst
might say that the market had 'negative breadth' from July 21-26, but that the
breadth turned positive on July 27...
...The advance - decline line: This is simply the number of
stocks that are currently trading higher (advancing issues) minus the number
of stocks currently trading lower (declining issues)... The advance / decline ratio: This ratio is derived from
dividing the number of stocks that are currently trading higher (advancing
issues) by the number of stocks that are presently trading lower (declining
issues)..."
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Copyright 2004 Highlight Investments Group. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Tags: stocks, issues, declining, advancing, analysis, chart, index, S&P 500, decline, Advance
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