Sentiment Indicators

200-DMA INDICATOR
The 200-DMA indicator tracks the proportion of Nifty 50 stocks trading above or below their 200-day simple moving average, a key measure of long-term market trends. About 30 per cent of Nifty 50 stocks are above their 200-DMA, while 70 per cent remain below, unchanged from last week. ICICI BANK closed above its 200-DMA this week, whereas WIPRO closed below it. NIFTY remained rangebound in the last five trading sessions after bouncing from the recent low of 21,964.60. This rangebound price action marked a high of 22,676.75, the nearest technical resistance and a 20-DMA level. It marked a low of 22,314.70, the nearest technical support zone. A move is expected in either direction if it breaches these levels. Now, it is entering a long weekend as Indian markets have a holiday on Friday due to a festival. Traders should manage their positions accordingly, considering overnight weekend risks like Donald Trump's tariff actions. Recently, the IndusInd Bank incident has shaken the entire street. It witnessed a 32 per cent drop in the last five trading sessions. This created panic among investors who invested in the financial services industry.



The fall in IT giants TCS, INFY, and WIPRO also adds to market fears. Meanwhile, index heavyweights Reliance, ICICI Bank, and Kotak Bank countered this weakness. As a result, the index remained rangebound in the last five trading sessions. 

SECTORAL SENTIMENT INDICATOR
This indicator evaluates how many stocks within sectoral indices are trading above or below their 200-day moving averages, offering insights into sector performance. Currently, the Nifty Financial Services and Nifty Metal sectors are trading above their 200-DMA. Sectors such as IT, Private Banks, Pharma, Realty, PSU Banks, Nifty Bank, Auto, FMCG, and Media remain below their 200-DMA, signalling weakness across these segments. This week, the markets witnessed significant sectoral movements. Nifty IT recorded the steepest decline of 100 per cent, followed by Nifty PSU Bank, which fell 100 per cent. Nifty Media and Nifty Realty both declined 80 per cent, while Nifty Metal dropped 60 per cent. Nifty Pharma and Nifty Financial Services saw a 50 per cent decrease, while Nifty Auto recorded a decline of 33.33 per cent. Nifty Bank dropped 41.67 per cent, followed by Nifty Private Bank, which fell 20 per cent. Nifty FMCG recorded the lowest decline of 33.33 per cent.



Since last Wednesday, the Nifty Midcap 150 and Nifty Smallcap 250 have underperformed the Nifty 50, registering 2 to 3 per cent declines, while the Nifty 50 index is roughly 0.3 per cent down. Investors should focus on resilient sectors like Metal and Private Sector Banking giants for shortterm bullish trades, while traders should focus on weaker areas such as IT, Media, and Realty for short-term opportunities. 

Indicator To Gauge Internal Strength
This indicator helps gauge the internal strength of the market. A higher number of Nifty 500 stocks reaching 52-week highs and fewer hitting 52-week lows indicate a bull market, while the opposite suggests bearish conditions. This week, the average ratio of stocks marking fresh 52-week highs to 52-week lows stood at 0:3, compared to 1:59 last week. On average, no stock hit fresh 52-week highs this week, and muted action was seen, with around 3 stocks hitting new 52-week lows compared to 59 last week. Over the past week, the Nifty 500 and Nifty 50 exhibited similar trends, posting declines of 0.9 per cent and 0.3 per cent, respectively. Both indices are trading below their 200-day moving averages. Bulls protect the recent bounce for now, but visible internal weakness persists in the market. Key monitoring levels include support around 19896.95 and resistance near 20549.20, which are the recent highs and lows of the bounce. A directional move can be seen on either side once the levels are breached. Dow Jones closed below its 200- DMA in the last trading session. Compared to the Nifty 500's trading action, Nifty 500 held its strength during the same time. The S&P 500 index witnessed a fall of around 4 per cent, and the Dow Jones declined around 3 per cent. President Trump's tariff actions likely backfired on their markets. FIIs sold more than Rs 9,300 crore, and DIIs bought more than Rs 7,700 crore.



This trading action justifies the Nifty 500 index's rangebound movement with bearish sentiments. As markets enter a long weekend, overnight risks such as global developments and Trump's actions can be a concern for traders who hold overnight positions. 

(Closing price as of March 12, 2025)

*LEGEND: • DMA - Daily Moving Average. • MACD - Moving Average Convergence Divergence • RMI - Relative Momentum Index • ROC - Rate of Change • RSI - Relative Strength Index