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Accumulation / Distribution Line
A cumulative indicator using price and volume together to assess whether an asset is being bought (accumulated) or sold (distributed) over time.
The Accumulation / Distribution Line, developed by Marc Chaikin, is a cumulative, running indicator built from where each period's closing price falls within its own high-low range, with that reading weighted by the period's volume and added to a continuously running total.
A close near the top of its range contributes a positive (accumulation) value, and a close near the bottom contributes a negative (distribution) value, with volume determining how much weight that period carries in the cumulative total. See Kaavon's dedicated Accumulation / Distribution Line article for the full calculation.
Examples
- The Accumulation / Distribution Line rising while price stays flat is commonly interpreted similarly to OBV divergence — a sign of underlying accumulation.
- A period's contribution to the Accumulation / Distribution Line depends on both where it closed within its range and how much volume traded during it.