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The Advance/Decline Ratio is a basic market breadth indicator that compares the number of advancing stocks to the number of declining stocks by dividing them as follows: advancing stocks / declining stocks. It uses the same two data series as the Advance/Decline Line but instead of subtracting them it divides them. It helps identify the breadth of a move in the market. Often a moving average is added to smooth out the indicator and to help assess its direction. It can be used to spot overbought and oversold situations. Please note the Advance/Decline Ratio cannot have a negative value and is best used in combination with other analysis techniques.
The current Advance/Decline Ratio for the S&P500 is about 0.7276, 211 companies are advancing in stock price and 289 are declining.
The Advance/Decline Line is a market breadth indicator that shows the degree of participation of individual stocks in a market rise or fall. It does so by subtracting the number of declining stocks from the number of advancing stocks. The indicator cumulates these differences, called net advances, over a certain period by adding the difference between the number of declining and advancing stocks to the previous indicator value. It can be used to confirm the strength of a trend, because the more stocks that participate, the stronger the overall trend and vice versa. Traders look for divergence to spot potential trend reversals. The indicator is best used in combination with other analysis techniques.
The current Advance/Decline LINE for the S&P500 is about -78.