- The advance/decline line (A/D) is a breadth indicator used to show how many stocks are participating in a stock market rally or decline.
- When major indexes are rallying, a rising A/D line confirms the uptrend showing strong participation.
- If major indexes are rallying and the A/D line is falling, it shows that fewer stocks are participating in the rally which means the index could be nearing the end of its rally.
- When major indexes are declining, a falling advance/decline line confirms the downtrend.
- If major indexes are declining and the A/D line is rising, fewer stocks are declining over time, which means the index may be near the end of its decline.
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