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 averages. 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. Among the constituents of Nifty index, 58 per cent of the stocks are trading above their 200-DMAs and 42 per cent stocks are trading below 200-DMAs. In the last five trading sessions, Power Grid and Tech Mahindra have managed to close above their 200-DMAs, while on the flip side, Asian Paints, GAIL, Grasim and ITC have closed below their 200-DMAs. On a w-o-w comparison basis, no significant development was seen as the ratio remains unchanged. On Friday, we saw almost 62 per cent stocks were trading above their 200-DMAs, and since then, almost 4 per cent stocks have managed to close below 200-DMAs. The index has seen some cool-off from its high levels, indicating investors preferring to book profit from the 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 averages. This will help us to know which of the sectors are improving their performance. The Indian market witnessed fresh closing highs on Tuesday as investors continued to cheer the decisive mandate for the BJP-led NDA in the general election. The broad-based buying interest in most of the sectors helped the benchmark indices to scale higher. On a w-o-w comparison basis, the sectoral index Nifty PSU Bank has seen substantial improvement as almost 25 per cent stocks have managed to close above their 200-DMAs, followed by Nifty Private Bank and Nifty Realty, both of which saw 10 per cent stocks close above their 200-DMAs, while the Nifty Bank and Nifty Media saw 8.33 per cent and 6.66 per cent stocks closing above 200- DMAs, respectively. On the flip side, among the constituents of Nifty IT, almost 10 per cent stocks slipped below their 200- DMAs.The Nifty Metal index saw minor dip in the stocks, as the stocks trading below their 200-DMAs fell to 80 per cent from 86.66 per cent last week. The Nifty Auto, Nifty FMCG and Nifty Pharma remain unchanged on a w-o-w comparison. The buying interest in Nifty Realty sector has continued in the current week also, as among its constituents, almost 40 per cent stocks have managed to close above their 200-DMAs in the last two weeks. The Nifty PSU Bank is consistently witnessing new addition in stocks which are trading above their 200-DMAs since last two weeks. On a cumulative basis, almost 33.33 per cent constituents have managed to close above their 200-DMAs in the last two weeks. The current structure of Nifty PSU Bank index is quite healthy as almost 66.66 per cent stocks are trading above their 200-DMAs.



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. On a w-on-w comparison basis, the previous week's ratio was 13:17 and, in the current week, the ratio was 22:4, where on an average 22 stocks touched new 52-week highs and 4 stocks hit 52-week lows. In the current week, we have seen not only there is significant addition in the stocks making 52-week highs, but also notable decline in the stocks making 52-week lows. This clearly suggests that the internal strength of the market has improved significantly and there is broad participation in the rally. One interesting fact that comes to notice is that in the current week, the average number of stocks making 52-week highs was higher since February 2019.The significant additions in the stocks making 52-week highs clearly indicates that the bulls may continue to dominate.



*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 May 29, 2019)