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 simple moving averages. The 200-DMA is considered as an important and one of the basic technical indicators that can be used to determine longterm trend of a security. Almost 56 per cent stocks that constitute the Nifty50, the bellwether equity benchmark, are trading above their 200-DMAs, while 44 per cent stocks are trading below their 200-DMAs. On a w-o-w comparison basis, there is no significant development seen as the ratio remains unchanged. Among the constituents of Nifty 50, Bajaj Finance, Bajaj Finsv and Titan are trading way above their 200-DMAs (on an average 23.33 per cent), while on the downside, Yes Bank is trading below its 200DMA by 100.51 per cent and Sun Pharma by 19.56 per cent. It would be interesting to watch the behaviour of 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. The uncertainty over the Union budget is clearly visible in the indicator as the ratio was seen oscillating in a range since the last 14 trading sessions. However, as on Wednesday, almost 56 per cent stocks from Nifty 50 space are trading above their 200-DMAs, which clearly suggests that the bulls are going into major event with a slight upper hand over the bears.



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 week had been a lacklustre one and not much action has been seen as the investors are waiting for the Union budget. This is clearly visible in the sectoral sentiment indicators as more than half of the sectors remain unchanged on a week-on-week comparison basis. The financial sector is consistently witnessing new addition in stocks that are trading above their 200-DMAs since last two weeks as investors remained optimistic about the reforms push in the Union budget due on Friday. On a w-o-w comparison basis, as many as 16.67 per cent of the stock components of the Nifty PSU Bank have managed to close above their 200-DMAs, followed by Nifty Private Bank, where 10 per cent and about 8.33 per cent in the Nifty Bank have witnessed components surging above the crucial 200-DMA. The Nifty FMCG index has seen improvement in the stocks, as the stocks trading above their 200-DMAs surged to 46.66 per cent from 33.33 per cent last week. On the flip side, among the constituents of Nifty IT, almost 10 per cent stocks have managed to close below their 200-DMAs. The Nifty Auto, Nifty Financial Services, Nifty Media, Nifty Metal, Nifty Pharma and Nifty Realty remain unchanged on a w-o-w comparison. Among the constituents of Nifty Auto, almost 93.75 per cent stocks are trading below their 200-DMAs since May 2019, but in the current week, one interesting fact that came to notice was that last week the stocks were trading below their 200-DMAs by about average of 12.20 per cent, but in the current week, despite the weak auto sales numbers, we have seen the average rebound by 2.61 per cent. 



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 5:20 and, in the current week, the ratio was 19:10, where on an average 19 stocks touched new 52-week highs and 10 stocks hit 52-week lows. On June 27, we have seen that the ratio has turned in favour of the bulls for the first time since June 4, 2019. In the current week, we have seen not only there is significant addition in the stocks making 52-week highs, but also there has been a notable decline in the stocks making 52-week lows. With this, 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 last week of May 2019. These ongoing structural changes clearly suggest that the bulls are getting the upper hand over bears ahead of the major event of the Union budget. 



 (Closing price as of July 03, 2019)