Sentiment Indicator

200-DMA INDICATOR: This indicator is a measure of the percentage of Nifty 50 stocks that are trading above/below their 200-day moving average. The 200-DMA is considered important and one of the basic technical indicators that can be used to determine long-term trend of a security. Almost 70% of the stocks that constitute the Nifty50, the bellwether equity benchmark, are trading above their 200- DMA, while 30% stocks are trading below its 200-DMA. On a week-on-week comparison basis, we observed that about 4% of the stocks entered above the 200-DMA territory and the three stocks which have gone past their 200- DMA are Tata Motors, ONGC and Tata Steel. The percentage of stocks trading above their 200-DMA are trading near one-month high. The index has seen some cool-off from its high levels, indicating investors preferring to book profit from overheated stocks and buying interest emerging in select oversold stocks.



Sectoral Sentiment Indicator : This indicator basically interprets the number of stocks in the sectoral indices trading above/below their 200-day moving average. This will help us to know which of the sectors are improving their performance. The review of this indicator shows that in the week gone by, Nifty Bank and Nifty Private Bank were two pockets where all the stocks were traded above their 200-DMA, while in the Nifty PSU Bank about 83 per cent stocks were seen trading above their 200-day moving average, and on w-o-w basis, there has been no significant change. On the other hand, Nifty Financial saw a marginal dip in the stock, as stocks traded above its 200-day moving average fell to 65 per cent from 70 per cent last week. Some of the pockets which had seen some addition to the stock trading above their 200- DMA were Nifty Pharma, where improvement of 10 per cent was seen in the stocks trading above 200-DMA, Nifty Metal, Nifty Auto and Nifty FMCG. The buzzing sectoral index Nifty IT remain unchanged ahead of the quarterly earnings, which will kick off from Friday. We had predicted last week that Nifty Auto, Pharma and FMCG would be in action, and these indices were seen improving on expected lines. However, some of the banking and financial stocks had seen a pause or corrective decline.



Indicator To Gauge Internal Strength : This indicator helps us to gauge the internal strength of the market. Among the Nifty 500 stocks, the increasing number of stocks reaching new 52-week highs and fewer stocks reaching new 52-week lows is representative of a bull market, and vice-versa being true of a bear market. Considering the below chart, it clearly indicates that in the past five trading sessions, on an average, five stocks were seen making fresh 52-week highs, and on the flip side, about two stocks were seen making new 52-week lows. On a week-on-week comparison basis, the previous week’s average ratio was 14:3, where on the daily average basis, 14 stocks had touched new 52-week highs and average of three stocks hit 52-week lows. In the current week, the ratio had been reduced to 5:2, where on an average only five stocks were making new 52-week highs and two stocks hit 52-week lows on a daily average basis. This indicator clearly suggests the week had been a lacklustre one and not much action has been seen. Though the ratio has reduced significantly, the stance still remains bullish as the number of stocks hitting 52-week highs is greater than the number of stocks hitting 52-week lows.



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


(Closing price as of Apr 10, 2019)