This indicator takes two inputs: period and an optional lag(offset) input. While 21 is the recommended period short or longer periods(7 or 60) days may also be useful in some ranking strategies. It is based on the principle that stocks which close above their mid-point particularly on high volume days are under accumulation and should be looked upon favorably.

The daily volume accumulation totals are aggregated over the period and the resulting accumulation/distribution is divided by the total trading volume of the period. This creates an indicator of supply and demand for a stock which ranges from -100 to +100 with any values of +/- 20 being very strong and very weak readings.

Ranking a universe of stocks by the ChaikinAD will give an accurate indication of strong to weak stocks based on volume accumulation Buying stocks which have strong fundamentals, have had a recent decline in price over the past 4- 7 days and still have a positive ChaikinAD value > 0 is a profitable strategy in a bull market

Example
The Chaikin Accumulation Distribution Indicator of the money flowing into and out of a stock over the previous 4 weeks can be written as:

ChaikinAD(21)