The Williams Accumulation/Distribution study is used to determine either the marketplace is controlled by buyers (accumulation) or by sellers (distribution). Its initial value is zero. If the Close price exceeds the Close price one bar ago, a distance between the Close price and the True Range bottom is added to the indicator. If the Close price is less than the Close price one bar ago, a distance between the close and the True Range top is subtracted from the indicator. If the Close price is unchanged, the indicator is unchanged as well.
This study may be analyzed for divergences between the value of the indicator and the price. If the price is making lower lows but the indicator fails to make lower lows, this may be an indication of a bullish reversal. Similarly, if the price is making higher highs but the indicator fails to make higher highs, a bearish reversal might occur.
|The Williams Accumulation/Distribution line.
*For illustrative purposes only. Not a recommendation of a specific security or investment strategy.