Accumulation/Distribution Line

The Accumulation/Distribution (A/D) Line is a volume-based indicator that tracks cumulative money flow into and out of a security by incorporating both the direction of price movement and where within the session's range the price closed. When the price closes in the upper half of the day's range on high volume, the A/D Line rises (accumulation); when it closes in the lower half on high volume, it falls (distribution). Unlike OBV (which uses only the direction of the close relative to the prior session), the A/D Line considers intraday price location, making it a more nuanced measure of supply and demand dynamics. Divergences between the A/D Line and price are among the most powerful signals in volume analysis — a falling A/D Line while prices remain high warns of underlying distribution and potential reversal.