Advance Decline Ratio (ADR): Know This Term By CA Sayan Ghosh


  • Advances are the number of stocks closing at a higher price than the previous day’s close.
  • Decline are the number of stocks closing at a lower price than the previous day’s close.
  • ADR is an indicator used in technical analysis to compare the number of stocks that closed higher than the number of stocks closed lower than their previous day’s closing prices.
  • On a standalone basis, the ADR may reveal whether the market is overbought (high ADR) or oversold (low ADR).
  • The trend of the ADR can tell us whether the market is in a bullish or bearish trend.

A market-breadth indicator used in technical analysis to compare the number of stocks that are trading higher with the number of stocks that are trading lower than their previous day's closing prices. To calculate the advance/decline ratio, divide the number of advancing shares by the number of declining shares. The A/D ratio can be calculated for various time periods, such as one day, one week or one month.

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