Sentiment Indicators

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 an important and one of the basic technical indicators that can be used to determine the long-term trend of a security. The Nifty has been trading in a range of 350 points over the last 24 trading sessions and this is visible in the 200-DMA indicator as the last 18 trading sessions ratio is oscillating in range. Among the constituents of the Nifty index, 54 per cent stocks are trading above their 200-DMAs and 46 per cent stocks are trading below 200-DMAs. In the last five trading sessions JSW Steel has managed to close above their 200-DMAs, while on the flip side, Ultratech Cement has managed to close below their 200-DMA. On a W-o-W comparison basis, there is no significant development was seen as the ratio remains unchanged. On December 03, the ratio turned into the favor of bears for the first time after November 22 but on Wednesday, the bulls have made a comeback as almost 6 per cent stocks have managed to close above their 200-DMA. Among the constituents of Nifty 50, Bharti Airtel and ICICI Bank are trading way above their 200-DMAs (on an average of 29.08 per cent). It would be interesting to watch the behavior of the abovementioned stocks as they look extremely overstretched. It would be no surprise if we see these stocks stall their momentum and slide into a period of consolidation.

Sectoral Sentiment Indicator : 

The sectoral sentiment indicator talks about the number of stocks in sectoral indices that are trading above/below their 200-day moving averages. It helps us in identifying the sectors, which are improving their performance. The Nifty index has witnessed almost 223.50 points or 1.83 per cent downward move from the high of November 28 as weak GDP data and dip in auto sales figures after festival season weighed on investors sentiment. On a W-o-W comparison, as many as 10 per cent of the stock components of the Nifty IT, Nifty Private Bank, and Nifty Realty, each, have managed to close above their 200-DMAs, followed by Nifty Bank where 8.33 per cent components surged above the crucial 200-DMA. The Nifty Metal index has seen a minor improvement in the stocks, as the stocks trading above their 200-DMAs surged to 46.66 per cent from 40 per cent last week. On the flip side, the constituents of Nifty Auto have seen a substantial decline as 20 per cent constituents have managed to close below its 200-DMA, followed by Nifty Financial Services where 5 per cent stocks have closed below its 200-DMA. Nifty FMCG, Nifty Media, Nifty Pharma, and Nifty PSU bank indices remained unchanged on a WoW basis. Among the constituents of the Nifty Realty index, the stocks were trading below their 200-DMAs by an average of about 2.61 per cent the last week but we have seen the average jump by 2.72 per cent in this week and, currently, the stocks are trading above their average by an average about 0.11 per cent. The Nifty Private Bank and Nifty Bank are consistently witnessing new addition in stocks, which are trading above their 200-DMAs for the last three weeks. On a cumulative basis, almost 30 per cent of Nifty Private Bank and 24.99 per cent of Nifty Bank constituents have managed to close above their 200-DMAs in the last three weeks. This indicates that Banking stocks have helped the market to sustain at higher levels.

Indicator To Gauge Internal Strength : 

This indicator helps us to gauge the internal strength of the market. Among the Nifty 500 stocks, a higher number of stocks, reaching 52-week highs and lesser stocks, hitting 52-week lows represents a bull market. The opposite suggests a bear market. On a W-o-W comparison, the previous week's average ratio was 9:7 and the current week's average ratio is 10:4, where, on an average, 10 stocks touched new 52-week highs while four stocks hit new 52-week lows. This week, the Nifty 500 index has witnessed almost 175.30 points or 1.77 per cent downward move from the high of November 28. Despite this downward move, we have seen the decline in stocks making new 52-week low. With this, one interesting fact that comes to notice, which is the average number of stocks, making new 52-week low this week, was lowest since September 09, 2019. This indicates that in the current week the overall health of the market has improved as compared to the last week.