Education / Indicators / UPSIDE/DOWNSIDE RATIO

The Upside/Downside Ratio function determines the momentum of the market by calculating the ratio of the volumes of advancing to declining issues.

Calculation

The Upside/Downside Ratio is considered for every certain exchange (NYSE) and can be calculated according to the following formula:

Daily Valume of Advancing Stocks / Daily Volume of Declining Stocks

When the Upside/Downside Ratio exeeds 1.0, this means that there is more volume of those stocks that are increasing in price than of stocks that are decreasing in price during one day.

The higher the U/D ratio, the more bullish the signal: high readings above 4 are considered bullish signals, and low readings below .75 are considered bearish signals.