HSI 15 MAS A/D Line

4 ago

HSI 15 MAS A/D Line

This script calculates the Advance-Decline Line (AD Line) for the top 15 most active stocks within the Hang Seng Index, representing a significant 65.82% of the index's total weight. The AD Line is a crucial breadth indicator, measuring the difference between the number of advancing and declining stocks within the selected 15 constituents. By tracking this cumulative difference over time, the AD Line provides insights into market trends and potential reversals, reflecting the underlying strength or weakness of the market.

Features:

Top 15 Constituents: The script focuses on the 15 most influential stocks based on their weight in the Hang Seng Index, ensuring that the analysis is concentrated on the stocks that most impact the index's movements.

Advance-Decline Calculation: The script calculates whether each stock in the list is advancing or declining on a given day and then sums these values to create the AD Line.

Cumulative Indicator: The AD Line is plotted as a cumulative indicator, providing a clear visual representation of the overall market trend based on the breadth of advancing versus declining stocks.

How It Works:

Symbol Input: The script uses TradingView's `request.security` function to pull data for each of the 15 stocks.

Calculation of Advances and Declines: For each stock, the script determines whether it is advancing or declining compared to the previous day’s closing price.

Cumulative Sum: The script then cumulatively sums the number of advancing stocks minus the declining ones to plot the AD Line.

Use Case:
This AD Line is useful for traders and analysts who want to gauge the strength of the market trend beyond just price movement, by analyzing how many stocks are participating in the trend. It's particularly effective in confirming or questioning the sustainability of a trend, making it a valuable tool in both bullish and bearish market conditions.

Important Notes:

Ensure that the 15 selected stocks represent a diverse cross-section of sectors within the Hang Seng Index for a more accurate reflection of the market’s overall health.

The AD Line should be used in conjunction with other technical indicators to make more informed trading decisions.