Advance/Decline line

A market breadth indicator that tracks the cumulative difference between advancing and declining stocks, treating each stock equally regardless of size. By showing how broadly stocks participate in rallies or declines, the Advance/Decline (A/D) line reveals the underlying health of market moves beyond what price indexes alone display. A rising A/D line alongside an index uptrend signals strong, broad participation, while divergences—such as an index making new highs while the A/D line falls—warn that gains may be concentrated in a few large stocks and potentially unsustainable. Moving averages of the A/D data help smooth daily volatility and enhance signal reliability. Widely used on the New York Stock Exchange (NYSE), the A/D line serves as an early warning system for trend reversals and a barometer of participation strength, though it should be paired with other indicators to confirm market outlook.