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11504.95      -11.15 -0.10%

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30093.30      -260.95 -0.86%
ACC 1425.75 (1.15%) Link
Symbol     LTP Chng%
NATCOPHARM 890.80   + 15.20
RAJESHEXPO 509.35   + 10.75
DRREDDY 5333.35   + 10.48
SUVEN 56.45   + 9.51
CGCL 234.95   + 7.80
Symbol     LTP Chng%
ESSELPACK 251.85    -7.66
ORIENTELEC 202.30    -6.19
AEGISCHEM 233.20    -5.40
MAHINDCIE 122.30    -5.16
JINDALSAW 67.40    -5.00
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Average Directional Index (ADX)

Introduction

ADX is an indicator used in technical analysis as an objective value for the strength of trend. ADX is non-directional indicator, so it will quantify a trend's strength regardless of whether its value is up or down. ADX is usually plotted in a chart window along with two lines known as the DMI (Directional Movement Indicators). ADX is derived from the relationship of the DMI lines.

Analysis of ADX is a method of evaluating trend and can help traders to choose the strongest trends and also how to let profits run when the trend is strong.

Formula

First Adx14 = 14 Period Average of DX
Second Adx14 = ((First Adx14 * 13) + Current DX value) / 14
Subsequent ADX14 = ((Prior ADX14 * 13) + Current DX Value) / 14

Advantage

The Average Directional Index (ADX) is used to measure the strength or weakness of a trend, not the actual direction. Directional movement is defined by +DI and -DI. In general, the bulls have the edge when +DI is greater than - DI, while the bears have the edge when - DI is greater. Crosses of these directional indicators can be combined with ADX for a complete trading system.

Sample Calculation

Technical chart for ADX

Technical Indicators

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