Chartered Market Technician Practice Exam 2025 – Complete Prep Guide

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How is the Advance/Decline line calculated?

Adding unchanged stocks to declining stocks

Subtracting advancing stocks from declining stocks

Subtracting the number of declining stocks from advancing stocks

The Advance/Decline line is a key market breadth indicator that reflects the market's overall health by comparing the number of advancing stocks to the number of declining stocks. To calculate the Advance/Decline line, one subtracts the number of declining stocks from the number of advancing stocks. This method effectively captures the net movement of stocks and gives insights into market trends, indicating whether the market is leaning towards advancing or declining overall.

When interpreting the Advance/Decline line, a rising line suggests that more stocks are advancing than declining, which typically signals a bullish market sentiment. Conversely, if the line is falling, it indicates more stocks are declining, suggesting bearish sentiment. Therefore, the correct calculation method plays a crucial role in the utility of this indicator for market analysis.

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Aggregating all stocks regardless of movement

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