A divergence between an increase in a stock market series and the rest of the stock market can be detected using
A) Debit balances in brokerage accounts
B) Short interest
C) The advance-decline line
D) Confidence index
E) None of the above

Question

Quizplus · Accepted Answer

The advance-decline line tracks the number of advancing stocks (those that have gone up in price) versus the number of declining stocks (those that have gone down in price) on a particular stock exchange. If the stock market index is rising but the advance-decline line is falling, it suggests that only a handful of stocks are driving the market higher and that the majority of stocks aren't faring as well. This is a divergence that can indicate a potentially unsustainable market rally.

A Divergence Between an Increase in a Stock Market Series