The Accumulation/Distribution Line is similar to the On Balance Volume (OBV), which
sums the volume times +1/-1 based on whether the close is higher than the previous
close. The Accumulation/Distribution indicator, however multiplies the volume by
the close location value (CLV). The CLV is based on the movement of the issue within
a single bar and can be +1, -1 or zero.
The Accumulation/Distribution Line is interpreted by looking for a divergence in
the direction of the indicator relative to price. If the Accumulation/Distribution
Line is trending upward it indicates that the price may follow. Also, if the Accumulation/Distribution
Line becomes flat while the price is still rising (or falling) then it signals an
impending flattening of the price.
The Accumulation/Distribution Line was developed by Marc Chaikin.
The Accumulation/Distribution Line should not be confused with the Williams price
This indicator can help confirm a trend. See the lines drawn below and how the correspond
to the price action.