PDSnet Glossary

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Introductory Technical Fundamental Economics Opinion Sectors International Regulatory Other Markets

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Definition

Your software includes a net advance/decline line (Net A/D) for each sector of the market. These are "breadth indicators" which show the extent of the markets move for various sectors and the market as a whole. For example, the Net Over shows the number of shares in the overall index which went up minus the number that went down. This net figure is then added to (or subtracted from) a running total and a chart is drawn of the result. Thus if on a certain trading day you have 186 shares going up and 74 going down then your net advance is 112 for that day - which is added to yesterday's running total and graphed. In a net A/D all shares are treated equally irrespective of how big or small they are. Thus an up-move in a huge share like British America Tobacco can be cancelled out by a down move on the smallest Alt-X share on the same day. Sector indexes, on the other hand, are weighted for the market capitalisation of the shares which they include. For this reason, it is interesting to do a comparative relative strength of the net A/D against its sector index. Since the reorganisation of the JSE indexes and sectors by the JSE, the Net A/D charts only go back as far as 24th March 2021. Obviously, with the passage of time, their databases with lengthen and become more useful.

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