What is stocks Advance Decline Ratio?

1. Advances are the number of stocks closing at a higher price than the previous day’s close.

2. Declines are the number of stocks closing at a lower price than the previous day’s close.

3. ADR is an indicator used in technical analysis to compare the number of stocks that closed higher than the number of stocks closed lower than their previous day’s closing prices.


4. On a standalone basis, the ADR may reveal whether the market is overbought (high ADR) or oversold (low ADR).

5. The trend of the ADR can tell us whether the market is in a bullish or bearish trend.

(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)