Creation / distribution indicator

Creation / distribution indicator
Creation / distribution
Overview
Accumulation / Distribution is a momentum indicator that associates changes in price and volume. The indicator is based on the premise that the more volume that accompanies price ranges, the most significant price moves.
Interpretation
Accumulation / Distribution is really a variation of the more popular in the Balance Volume indicator. Both of these indicators attempt to confirm price changes by comparing the volume associated with prices.
When the Accumulation / Distribution moves up, it shows that security is being accumulated, as most of the volume is associated with upward price movement. When the indicator moves down, it shows that security is being distributed, as most of the volume is associated with downward price movement.
Differences between the Accumulation / Distribution and cost of security implies a change is imminent. When a divergence does not occur, prices usually change to confirm the Accumulation / Distribution. For example, if the indicator moves up and cost of security is going down, prices are likely to occur.
Battle Mountain price diverged as reached new heights in late July while the indicator has been falling. Prices then corrected to confirm the trend of the indicator is.
Calculation
Part of the daily volume is added or subtracted from the total cumulative. The nearer the closing price is high for the day, more volume added to the cumulative total. The nearer the closing price is low for the day, more volume subtracted from the total cumulative. If proximity is exactly between high and low prices, nothing is added to the cumulative total.