The Accumulation Distribution (A/D) line is used to measure the cumulative flow of funds into and out of a security. There are 3 parts to calculating the A/D line. First calculating the money flow multiplier using the price close, price high and price low numbers. Next money flow volume is calculated by multiplying volume for the period with money flow multiplier. Finally A/D line is calculated as the sum of previous A/D point and current money flow volume.


Percentage change in A/D point is calculated as the percentage difference in A/D points over a 1 week period. So if the current A/D number is 100 and the A/D number 1 week ago was 85, percentage change in A/D is (100/85) – 1 = 17.64%.


Uptrend in prices accompanied by negative percentage change in A/D line suggests underlying selling pressure and could be a precursor to a bearish trend in stock price. Conversely downtrend in prices accompanied by positive percentage change in A/D line indicates underlying buying pressure and could foreshadow a bullish reversal.