What is ADX?
ADX (Average Directional Index), developed by J. Welles Wilder, measures trend strength on a 0-100 scale - it deliberately says nothing about trend direction. A rising ADX above 25 means the current price move (whether up or down) has real momentum behind it; an ADX below 20 means price is choppy or range-bound, with no dominant direction. Traders typically pair ADX with the directional indicators (+DI / -DI) it’s derived from to get direction, but ADX itself is purely a strength gauge.
A high ADX on a falling stock means the decline has strong momentum, not that a reversal is coming - ADX confirms an existing trend’s strength, it doesn’t predict a turn.
Real ADX-14 across 6 large-cap stocks
CHART
ADX-14 - 6 real stocks
14-day Average Directional Index as of 2026-10-01.
Stocks compared: Reliance Industries Ltd · Tata Consultancy Services Ltd. · HDFC Bank Ltd. · Infosys Ltd · ICICI Bank Ltd. · Bharti Airtel Ltd.
Reading the spread
Across these 6 stocks, ADX-14 runs from 17.9 (HDFC Bank Ltd.) to 39.3 (Reliance Industries Ltd), a gap of 21.4. The middle value is 27.4, with 3 of 6 above it. The highest reading is 2.2 times the lowest, so the choice of stock changes this number a lot. Neither end is better or worse in itself; the number describes how a stock behaves, and what matters is whether that matches what you want.
How to use it in practice
ADX measures how strong a trend is, whatever its direction. A low reading suggests a market without a clear trend, where trend-following tools such as moving averages work poorly. A higher reading suggests a trend worth respecting. It helps you decide how much weight to give signals from RSI and the SMA.
Common mistakes
ADX tells you strength, not direction: a high ADX can mean a strong fall as easily as a strong rise. It is also a lagging, smoothed measure, so it moves after the trend has already formed. Conventional thresholds are rules of thumb rather than laws, and they vary by stock.
Frequently asked questions
What ADX value shows a strong trend?
Readings above 25 are commonly taken as a trending market and below 20 as a weak or absent trend, though the thresholds are conventions and vary by stock.
Does a high ADX mean the stock is rising?
No. ADX measures trend strength only. A high reading can come from a strong downtrend as well as an uptrend.
How is ADX different from RSI?
RSI measures how stretched the latest move is. ADX measures how strong the underlying trend is. They answer different questions and are often used together.
WHAT THIS MEANS FOR YOU Check ADX alongside the stock’s own price direction (is it above or below its SMA-50/SMA-200) and RSI before drawing a conclusion - a high ADX with price below its long-term moving averages describes a strong downtrend, not a strong uptrend. ADX alone, without that context, is easy to misread.
METHODOLOGY ADX-14 computed from each stock’s own daily price history as of 2026-10-01. Data: Punji price history. Not investment advice.