The A/D line is a measurement of volume over a specified period of time. This can be compared to indicators measuring the flow of money, like the Money Flow Index. In fact, this is the basic idea behind the A/D line - before price movements, most likely increases or decreases in volume (flow of money) will be witnessed. The purpose of these indicators are to determine volume trends before others to either buy or sell earlier.

Divergences are used to analyze the Accumulation/Distribution Line.

For a bullish sign, look for positive divergence that is at least 2 weeks long, or greater. If there is no divergence, look for an upward trend of the Accum/Dist Line to determine a strong security.

For bearish sings, look for negative divergence that is at least 2 weeks long, or greater, and look for a downtrend in the Accum/Dist Line to determine a weak security.

The Accum/Dist Line should not be used alone as an indicator. Sometimes it will produce no divergences, and sometimes there is a lag between price movement and the Accum/Dist Line because it is not efficient at detecting subtle changes. Some of these problems have been addressed in the Chaikin Money Flow.