The accumulation/distribution indicator (A/D) is a cumulative indicator that evaluates whether a stock is being distributed or accumulated using volume and price. The A/D metric looks for differences between the volume flow and the stock price. This metric sheds light on how robust a trend is. If the price is growing, but the indication is declining, it means that there may not be enough purchasing or stockpiling volume to maintain the price increase, and a price decrease may be on the horizon.
The accumulation/distribution (A/D) line examines where the price is closed within the period’s range and multiplies that figure by volume to determine the supply and demand of an asset or security.