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 long-term trend of a security. Almost 76 per cent stocks that constitute the Nifty 50, the bellwether equity benchmark, are trading below their 200-DMAs, while 24 per cent stocks are trading above their 200-DMAs. In the last five trading sessions, HDFC Bank, L&T, SBI, Titan and UPL have managed to close below their 200-DMAs. For the first time since November 2018, UPL has managed to close below its 200- DMA and Titan has slipped below its 200-DMA for the first time since December 2018. While on the flip side, Hindustan Unilever has managed to close above its 200-DMA. On a w-o-w comparison basis, we observed that about 10% of the stocks have managed to close below their 200-DMAs. Among the constituents of Nifty 50, GAIL, Indiabulls Housing Finance, JSW Steel, M&M, Tata Motors, Tata Steel, VEDL and Yes Bank are trading way below their 200-DMAs (on an average 48.42 per cent). It would be interesting to watch the behaviour of the abovementioned stocks as they look extremely overstretched. It would be no surprise if we see these stocks stall their downside momentum and slide into a period of consolidation. However, the current structure of the indicator suggests that the bears have an upper hand over the bulls as the stock is trading below its 200-DMA, which marks it highest level for CY2019 as almost 76 per cent stocks from Nifty 50 space are trading below their 200-DMA. The traders should adopt a 'sell on rise' strategy in the market citing the ongoing weakness. 

Sectoral Sentiment Indicator : 

This indicator basically interprets the number of stocks in the sectoral indices tSectoral Sentiment Indicator :rading above/below their 200-day moving averages. This helps us to know which of the sectors are improving their performance. The Indian market remains within the grip of the bears in the current week also, and this is clearly visible in the sectoral sentiment indicator. On a w-o-w comparison basis, the sectoral index Nifty Bank has seen substantial decline as 25 per cent stocks have managed to close below their 200-DMAs, followed by Nifty Private Bank stocks by 20 per cent and Nifty Metal stocks by 13.33 per cent. The Nifty Financial Services and Nifty IT stocks declined by 10 per cent each. On the flip side, among the constituents of Nifty FMCG, almost 6.67 per cent stocks have managed to close above their 200-DMAs. The Nifty Auto, Nifty Media, Nifty Pharma, Nifty PSU Bank and Nifty Realty indices remained unchanged on a w-o-w comparison. In the current week, the constituents of Nifty Metal and Nifty Bank have seen substantial decline as the stocks of Nifty Metal on an average fell by 5.03 per cent and the stocks of Nifty Bank by 4.84 per cent. The Nifty Bank is consistently witnessing new addition in stocks that are trading below their 200-DMAs since last five weeks. On a cumulative basis, almost 66.66 per cent constituents have managed to close below their 200-DMAs in the last five weeks.

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 2:82 and, in the current week, the ratio was 3:77, where on an average three stocks touched new 52-week highs and 77 stocks hit 52-week lows. On August 5, 2019, the index slumped to five-month low, at which time almost 25.8 per cent stocks from Nifty 500 space marked new 52-week lows, which is highest in CY2019. However, after that, in the next two trading sessions, we saw a significant pause in the stocks making 52-week low. On August 1, August 2 and August 5, the average ratio was 1:97 where one stock had touched 52-week high and 97 stocks had touched 52-week lows, but in the last two trading sessions we have seen significant pause in number of stocks making 52-week low with the ratio of 5:46, where average five stocks had touched new 52-week high and 46 stocks touched new 52-week lows. This clearly suggests that the internal strength of the market has marginally improved in the last two trading sessions as the stocks are not participating among the stocks making 52-week lows in large numbers as was seen in the first three trading sessions of August 2019. However, in the coming session, we have to watch whether this marginal pause in the stocks marking new 52-week lows is a period of consolidation or a calm before the storm, i.e. a pause before the fresh round of selling starts.