guilium.. the A/D and money flow ratios are completely flawed.
The stock has been trading in the .0003x.0004 range for a while now.
If the last print off the tape at the end of the day .0004, the entire days volume is considered to be "accumulation" because according to the A/D rules:
In developing the Accumulation/Distribution Line, Chaikin took a different approach. OBV uses the change in closing price from one period to the next to value the volume as positive or negative. Even if a stock opened on the low and closed on the high, the period's OBV value would be negative as long as the close was lower than the previous period's close. Chaikin chose to ignore the change from one period to the next and instead focused on the price action for a given period (day, week, month). He derived a formula to calculate a value based on the location of the close, relative to the range for the period. We will call this value the "Close Location Value" or CLV. The CLV ranges from plus one to minus one with the center point at zero. There are basically five combinations:
( ( (C - L) - (H - C) ) / (H - L) ) = CLV
If the stock closes on the high, the top of the range, then the value would be plus one.
If the stock closes above the midpoint of the high-low range, but below the high, then the value would be between zero and one.
If the stock closes exactly halfway between the high and the low, then the value would be zero.
If the stock closes below the midpoint of the high-low range, but above the low, then the value would be negative.
If the stock closes on the low, the absolute bottom of the range, then the value would be minus one.
The CLV is then multiplied by the corresponding period's volume, and the cumulative total forms the Accumulation/Distribution Line.
At these stuck levels one could simply manipulate the accumulation/distribution line by throwing in a cheap share lot at the ask at the end of a high volume day (where there was infact, lots of selling). One could very easily and cheaply give the impression that the stock is gaining great "technical" strength by portraying that there's large accumulation efforts ongoing. .
If it's always closing at the high, which since the beginnign of 2003, there has been 51 trading days, the indicator is inherently flawed. PLNI has closed at the high of the day 32 times. It's closed at the very low of the day 9 times. It's closed somewhere in the middle 10 times.
This completely distorts the Accumulation/Distribution line. You might as well be flipping a coin to make your buy/sell decisions.
Referring to it as "Proof that people are accumulating the stock" is just mindboggling bogus.
