Advances and Declines

What are Advances and Declines?

Advances and declines give you an indication of how the overall market has performed. This gives you a good overview of the general market direction
As the name suggest 'advances' will inform you how the market has progressed
'Declines‘ signifies if the market has not performed as per expectations

What does Advance-Decline Ratio imply?

The Advance-Decline ratio is a technical Analysis tool that indicates market movement
Advance Decline ratio is calculated using the formula:
Advance Decline Ratio = Number of stocks that advanced/number of stocks that declined

How does Advance-Decline Ratio affect?

Generally, it is seen that in Bullish markets the number of stocks that advances is more than the ones that declines
Generally, in Bearish markets, the converse can be said to hold true i.e. stocks that advances are less than stocks that declines
The breadth of market indicator is used to gauge the number of stocks advancing and declining for the day.

What else there is to know about Advances and Declines?

'Remains unchanged' is a term used if the market scenario shows no advances or decline compared to the earlier day
Advances and declines are calculated from the previous day’s closing results
However, a market that is significantly on one side either in terms of advances or declines, may have a hard time reversing out of that direction the next day

Remember: Keeping a track of the Advance and Decline ratio will help you gauge the stocks worth investing along with the performance of stocks you have invested in.

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Advances and Declines - A Kotak Securities Review

by Kotak Securities on Sep 06, 2010

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Advances and Declines - A Kotak Securities Review — Presentation Transcript