Sentiment Indicators
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 as an important and one of the basic technical indicators that can be used to determine the long-term trend of a security. Almost 56 per cent stocks that constitute the Nifty 50, the equity benchmark index, are trading above their 200-DMAs, while 44 per cent stocks are trading below their 200-DMAs. On a w-o-w comparison basis, we observed that 2 per cent of the stocks have closed below their 200-DMAs. In the last five trading sessions, Titan has managed to close below their 200-DMA. From the low of February 19, 2019 to the high of June 03, 2019, the index has witnessed almost 14.33 per cent upside and along with this upward move, almost 40 per cent stocks has managed to close above its 200-DMA.
And if we look at the current upward move which started from the low of August 23, 2019 to an all time high level, the index has witnessed almost 15.57 per cent upside and this time along with this upward move, only 30 per cent stocks has managed to close above its 200-DMA. This clearly indicates that the investors are only concentrating on quality stocks in the current scenario and this up move is a courtesy of handful of stocks. Going ahead, it would be interesting to watch the behaviour of index in coming weeks as the current structure of indicator remains more or less similar to the last three months, as the ratio of stocks trading above/ below its 200-DMA is still in defined range.
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. On a w-o-w comparison basis, the sectoral index Nifty Metal has seen a substantial improvement as almost 20 per cent stocks have managed to close above their 200-DMAs, followed by Nifty Financial Services and Nifty Private Bank, both of which saw 10 per cent stocks close above their 200-DMAs, while the Nifty Bank and Nifty Auto saw 8.33 per cent and 6.66 per cent stocks closing above 200-DMAs, respectively. The Nifty FMCG, Nifty IT, Nifty Media, Nifty Pharma, Nifty PSU Bank and Nifty Realty remain unchanged on a w-o-w comparison.
The buying interest in Nifty Metal sector has continued in the current week also, as among its constituents, almost 26.99 per cent stocks have managed to close above their 200-DMAs in the last three weeks. In the last five trading sessions, index has gained almost 2.08 per cent and among the constituents, we have seen an average gain of 4.12 per cent in the last five trading sessions. The Nifty Realty index has been consolidating in range and there was no significant development, i.e., no addition or drop was seen in the ratio since the last two weeks, but after the government announced measures related to Rs 105 lakh crore for National Infra Pipeline, we have seen an average rebound of 2 per cent.
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 represent a bull market while, the opposite suggests a bear market. On a w-o-w comparison, the previous week's average ratio was 11:4 and, in the current week, the average ratio is 17:5, where, on an average, 17 stocks touched new 52-week highs while, five stocks hit new 52-week lows. In CY 2019, the Nifty 500 index has gained almost 7.66 per cent, but if we look at the performance of the stock actively traded on Nifty 500 during CY 2019, almost 60 per cent have recorded a decline in the stock price.
.jpg)
Since the low of August 23, 2019, the index has witnessed almost 15.27 per cent upward move but if you look at the average ratio of stocks hitting a new 52-week high/low stood at 13:13, where, on average, 13 stocks touched new 52-week highs while 13 stocks hit new 52-week lows. This clearly indicates only a handful of stocks have participated in the upward rally and also, it reflects that investment in quality stocks has been the buzzword on the D-street.