The Accumulation/Distribution is really a variation of the more popular
On Balance Volume indicator. Both of these indicators
attempt to confirm changes in prices by comparing the volume associated with prices.
When the Accumulation/Distribution moves up, it shows that the security is being
accumulated as most of the volume is associated with upward price movement. When the
indicator moves down, it shows that the security is being distributed as most of the volume
is associated with downward price movement.
Divergences between the
Accumulation/Distribution and the security's price imply a change is imminent. When a
divergence does occur, prices usually change to confirm the Accumulation/Distribution. For
example, if the indicator is moving up and the security's price is going down, prices will
probably reverse.