The Advance/Decline Line (Breadth) is one of the oldest and most basic key indicators, plotting the number of advancing issues divided by the total number of both advancing and declining issues. The basic premise behind volume indicators, including the Accumulation/Distribution Line, is that volume precedes price. Volume reflects the amount of shares traded in a particular stock and is a direct reflection of the money flowing into and out of a stock. Many times before a stock advances, there will be period of increased volume just prior to the move.

If there are more advancing issues than declining issues, the market is said to be strong or having good breadth. New highs in the index have tended to lead peaks in the market. When the line is breaking out to the upside one can usually expect the market pick up in the next few months.