Sentiment Indicator

200-DMA Indicator :
This indicator measures the percentage of Nifty 50 stocks that are trading above/below their 200-day simple moving averages. The 200-DMA is considered important as it is one of the basic technical indicators that can be used to determine the long-term trend of a security. Almost 16 per cent of the stocks that constitute Nifty 50-the equity benchmark index, are trading above their 200-DMAs while, 84 per cent of the stocks are trading below their 200-DMAs. In the last four trading sessions, Bajaj Finserv, HCL Tech, ICICI Bank, Infosys, POWERGRID, TECHM and Titan have closed below their 200-DMA.

On a WoW comparison basis, we observed that 14 per cent of the stocks have managed to close below their 200-DMAs in the last four trading sessions. For the first time since September 2019, ICICI Bank and Bajaj Finserv have managed to close below its 200-DMA. The current ratio of stocks, trading above/below its 200-DMA, stands at 16:84, which is the lowest since February 2019. Historically, many times we have seen that whenever, the ratio of stocks trading above/below their 200-DMA came in Sectoral

Sentiment Indicator :
This indicator basically interprets the number of stocks in the sectoral indices trading above/below their 200-day moving averages. This will help us to know which of the sectors are improving their performance. India’s count of Coronavirus cases and crash in crude oil prices has triggered another round of selling in Indian market. The broad-based selling in most of the sectors helped the benchmark indices to pierce the low of December 2018. On a WoW comparison basis, the sectoral index Nifty IT has seen a substantial decline as 40 per cent stocks have managed to close below their 200-DMAs, followed by Nifty Financial Services by 35 per cent. Among Nifty Realty, about 30 per cent of the stock constituents have moved below their 200-DMA as well as Nifty Private Bank, where 20 per cent component moved below the crucial 200-DMA.

Among Nifty Metal, about 13.33 per cent of the stock constituents had moved below their 200-DMA as well as Nifty Bank, where 8.33 per cent component moved below the crucial 200-DMA. Nifty Media index saw a minor dip in the stock, as stock trading above its 200-DMA fell to 6.66 per cent from 13.33 per cent last week. In the downward rally started from February 24, 2020, a major participation was witnessed in the financial sector as among the constituents of Nifty Financial Services and Nifty Private Bank, almost 75 and 40 per cent stocks have managed to close below their 200-DMAs in the last three weeks, followed by.

Indicator To Gauge Internal Strength :
This indicator helps us to gauge the internal strength of the market. Among Nifty 500 stocks, a higher number of stocks reaching 52-week highs and lesser stocks hitting 52-week lows represent a bull market while, the opposite suggests a bear market. On a WoW comparison, the previous week's average ratio was 4:71 and in the current week, the average ratio is 3:110 where, on an average, three stocks touched new 52-week highs while, 110 stocks hit new 52-week lows. Nifty 500 index has witnessed almost 737.30 points or 7.96 per cent downward move from the close of March 4, 2020. There are three key takeaways for the bears from the last four trading sessions’ downward move in the index. To begin with, the average number of stocks making new 52-week low was the highest since February 2019.

Following this, on Monday, we witnessed the highest number of stocks making new 52-week low since February 2019. Concluding this, in the current week, the between 70-80 and 30-20 zone, the major reversal has occurred. But in the current contest, the ratio of stocks trading above/ below their 200-DMA, is already above 80 and below 20, which looks extremely oversold. Going ahead, it would be interesting to watch the behaviour of index in the coming weeks. It would be no surprise if we see the index stall their momentum and slide into a period of consolidation 33.33 per cent stocks of Nifty Bank. Nifty Metal is consistently witnessing new addition in stocks, which are trading below their 200-DMAs since the last four weeks. In Nifty Metal Index, on a cumulative basis, almost 53.33 per cent constituents have managed to close below their 200-DMAs in the last four weeks. Among the constituents of Nifty PSU Bank Index, since the last two weeks, all the stocks are trading below its 200-DMA and on an average stocks are trading below their 200-DMA by 42.79 per cent. With this, index itself is trading below its 200- DMA by 36.32 per cent, which looks extremely oversold. Going ahead, the current structure of the sectoral sentiment indicator clearly indicates that the ratio of majority of sectors is tilted in favour of bears.average number of stocks making new 52-week high was lowest since July 2019. This clearly suggests that the internal strength of the market had drastically weakened in the last four trading sessions and this has helped the markets to scale lower.