Search Investopedia

Diffusion Index

Filed Under » , ,
Dictionary Says

Definition of 'Diffusion Index'

1. A measure of the percentage of stocks that have advanced in price or are showing a positive momentum over a defined period. It is used in the technical analysis of stocks.

2. A measure of the breadth of a move in any of the Conference Boards Business Cycle Indicators (BCI), showing how many of an indicators components are moving together with the overall indicator index.
Investopedia Says

Investopedia explains 'Diffusion Index'

1. The diffusion index is one of the many different tools used by technical analysts to increase the probability of picking winning stocks. Also known as the advance/decline diffusion index.

2. The diffusion index can help an economist or trader interpret any of the composite indexes of the BCI more accurately - the diffusion index breaks down the indexes and analyzes the components separately, exhibiting the degree to which they are moving in agreement with the dominant direction of the index. 

Related Definitions

  •

    Advance/Decline Line - A/D

    A technical indicator that plots changes in the value of the advance-decline index over a certain time period. Each point on the chart is calculated by taking the difference between the ...
    Read More »

  • Breadth of Market Theory

    A technical analysis theory that predicts the strength of the market according to the number of stocks that advance or decline in a particular trading day.
    Read More »

  • Fundamental Analysis

    A method of evaluating a security that entails attempting to measure its intrinsic value by examining related economic, financial and other qualitative and quantitative factors. ...
    Read More »

    • Technical Analysis

      A method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security's ...
      Read More »

    • The Conference Board

      A not-for-profit research organization for businesses that distributes information about management and the marketplace. It is a widely quoted private source of business intelligence.
      Read More »

    • Leading Indicator

      A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators are used to predict changes in the economy, but are not ...
      Read More »

    • Lagging Indicator

      1. A measurable economic factor that changes after the economy has already begun to follow a particular pattern or trend. 2. A technical indicator that trails the price action of an ...
      Read More »

    • Coincident Indicator

      An economic factor that varies directly and simultaneously with the business cycle, thus indicating the current state of the economy.
      Read More »

    • Business Cycle Indicators - BCI

      Composite of leading, lagging and coincident indexes created by the Conference Board and used to forecast changes in the direction of the overall economy of a country. They can be used ...
      Read More »

    • Business Cycle

      The recurring and fluctuating levels of economic activity that an economy experiences over a long period of time. The five stages of the business cycle are growth (expansion), peak, ...
      Read More »

Articles Of Interest

Sponsored links
Hot Definitions
Partner Links
Suggested Definitions