Absolute Breadth Index - ABI

DEFINITION of 'Absolute Breadth Index - ABI'

A market indicator used to determine volatility levels in the market without factoring in price direction. It is calculated by taking the absolute value of the difference between the number of advancing issues and the number of declining issues. Typically, large numbers suggest volatility is increasing, which is likely to cause significant changes in stock prices in the coming weeks.

BREAKING DOWN 'Absolute Breadth Index - ABI'

This tool is classified as a breadth indicator because the advancing/declining values are the only values used to create it. This index can be calculated using any exchange or a subset of an exchange, but traditionally the New York Stock Exchange has been the accepted standard.

To learn more on how to use this indicator, check out "What are the best technical indicators to complement the Haurlan Index?"

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RELATED FAQS
  1. What are the most common strategies for using the Absolute Breadth Index (ABI)?

    Read about some of the ways in which technical investors use the absolute breadth index to measure whether a market trend ... Read Answer >>
  2. How is the Absolute Breadth Index (ABI) calculated?

    Discover how technical analysts calculate an absolute breadth index to measure the volatility of indexes or sectors to predict ... Read Answer >>
  3. What are the most important trading signals used with the Absolute Breadth Index ...

    Discover which trading signals technical analysts look for when utilizing the absolute breadth index, a non-standard volatility ... Read Answer >>
  4. What are the best technical indicators to complement the Haurlan Index?

    Discover which technical indicators make the best complements to the Haurlan index, a market breadth tool designed to identify ... Read Answer >>
  5. Why is the Breadth Indicator useful for tracking the overall economy?

    See how analysts might use technical breadth indicators to judge the health of the economy as a whole, and learn why one ... Read Answer >>
  6. Why is it important for traders and investors to follow market indicators?

    Learn about market indicators such as the Advance/Decline Index and market breadth. Discover why these indicators are so ... Read Answer >>
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