Replies to post #68311 on MedGen Inc (MDIN)

[flaflyersfan]

Interloper777, the Accu/Dist line is misinterpreted by
most people;
It is just an indicator of the relationship between the
closing price versus the previous day's closing price;

Accumulation/Distribution Line Introduction -
Volume and the Flow of Money There are many
indicators available to measure volume and the
flow of money for a particular stock, index or
security. One of the most popular volume
indicators over the years has been the
Accumulation/Distribution Line. The basic premise
behind volume indicators, including the
Accumulation/Distribution Line, is that volume
precedes price. Volume reflects the amount of
shares traded in a particular stock, and is a direct
reflection of the money flowing into and out of a
stock. Many times before a stock advances, there
will be period of increased volume just prior to the
move. Most volume or money flow indicators are
designed to identify early increases in positive or
negative volume flow to gain an edge before the
price moves. (Note: the terms "money flow" and
"volume flow" are essentially interchangeable.)
Advertisement Methodology The Accumulation/
Distribution Line was developed by Marc Chaikin
to assess the cumulative flow of money into and
out of a security. In order to fully appreciate the
methodology behind the Accumulation/
Distribution Line, it may be helpful to examine
one of the earliest volume indicators and see how
it compares. In 1963, Joe Granville developed On
Balance Volume (OBV), which was one of the
earliest and most popular indicators to measure
positive and negative volume flow. OBV is a
relatively simple indicator that adds the
corresponding period's volume when the close is
up and subtracts it when the close is down. A
cumulative total of the positive and negative
volume flow (additions and subtractions) forms
the OBV line. This line can then be compared with
the price chart of the underlying security to look
for divergences or confirmation. 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 1. If the stock closes on
the high, the top of the range, then the value
would be plus one. 2. 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. 3. If the stock closes exactly halfway between
the high and the low, then the value would be
zero. 4. If the stock closes below the midpoint of
the high-low range, but above the low, then the
value would be negative. 5. 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.

http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:accumulation_distrib


The Accu/Dist is just a statistic. It is not an indicator
of people buying and holding a stock.

Hope this helps.
Good luck.

[cyberbullymouse]

Oh, I get it. That's why the PPS has been in steady decline for months.

Derp.