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 important as it is one of the basic technical indicators that can be used to determine the long-term trend of a security. Almost 54 per cent of the stocks that constitute Nifty 50 equity benchmark index are trading above their 200-DMAs while 46 per cent of the stocks are trading below the 200-DMA. On a weekly basis, we observed that there was a net change of 2 per cent of Nifty stocks plunging below their 200-DMA. In the last five trading sessions, HDFC and HDFC Bank plunged below their 200-DMA while JSW Steel rose above the key indicator. NSE Nifty 50 index was largely volatile this week as it swung in the range of 478 points, thanks to the globally-induced volatility. However, in the past five trading sessions, Nifty lost merely 151 points or 0.87 per cent. On Monday, the benchmark index witnessed a major gapdown after the US indices tumbled post the US non-farm payroll data.

The stronger-than-expected data led to aggressive rate hike fears thereby, denting investors’ sentiment. However, the Indian market showed strong resilience as it recovered most of the early losses. Interestingly, the benchmark index found strong support at the 200-DMA level this week and has bounced 136 points since then. Moreover, the IT-bellwether TCS opened the results season with a bang as it reported better-than-expected numbers. It posted a net profit of over Rs 10,000 crore this quarter amid strong double-digit growth in revenue. Meanwhile, India’s CPI for September stood at 7.41 per cent against 7.01 per cent in August. Currently, the difference between Nifty’s close and 200-DMA is 0.80 per cent, which was 1.73 per cent last week. As more corporate results are set to be declared in the coming week, stock-specific action remains the key while global as well as local cues shall continue to post obstacles.