change ratio (ADR) is to assist the judge the strength of the trend of the broader market indexes. Change ratio, also known as return-index of free fall, it is calculated as (r) =N total of the number of stocks moving/moving totals the number of declining stocks on the nth day, which is the traditional assisted methods of market analysis. We can of course innovation, using volume to a similar analysis of the difference between the air forces.
index description: change ratios also known as return-free drop index are shares number of shares within a certain period, and the number of falling stocks made a census to find out the ratio. Its theoretical basis is "pendulum theory", due to the stock market's supply and demand if the two extreme positions of the pendulum, when supply will have an extreme effect, toward the direction of demand pull is stronger and vice versa.
application principle: when the change rate (r) is greater than 1.5, said share prices long term, overbought excessive phenomenon, shares could fall again. When the change rate (r) is less than 0.5, the secular decline in share prices, oversold over the phenomenon, shares could rebound or recovery. When you change ratios (r) at 1.5 between 0.5 and bounce up and down, said share prices were mixed in the normal situation, no special overbought or oversold. When you change ratios (r) by more than 2 or less than 0.3, said the stock market at the end of bull market or bear market, with severe overbought or oversold.
in addition to the shares enter the great bull market, or expand a surge early in the second paragraph, change the ratio of absolute sale figures of the opportunity to more than 2.0, the other secondary surge over 1.5 is a selling point, and a bull market phenomenon rarely below 0.5, is an excellent buy. Change ratio falling below 0.75, usually to display a short-term buying opportunity.
at the beginning of the bear market, if fallen below 0.75, usually suggesting that intermediate rally, and at the end of the bear market, 10th when you change ratios below 0.5 per cent, to buy time. , Change the ratio of advance warning, especially in terms of short-term rebound or file more than graphics leading sign appears. If graphics and mixed ratio of divergence phenomenon, the trend will be reversed.