Sentiments 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 longterm trend of a security. Almost 54 per cent stocks that constitute the Nifty 50, the bellwether equity benchmark, are trading below their 200-DMAs, while 46 per cent stocks are trading above their 200-DMAs. In the last four trading sessions, stocks of IOC, Maruti and UPL have closed above their 200-DMA, while on the flip side, stocks of HDFC and TCS have managed to close above the 200-DMA. On a week-on-week comparison basis, we observed that about 2 per cent of the stocks have closed above their 200-DMA.

 The majority part of the September month was dominated by bears as the on-an-average ratio of stocks trading above/below their 200-DMA is 36:64, where on an average 36 per cent stocks are trading above their 200-DMA and on an average 64 per cent stocks are trading below their 200-DMA. But on month-on-month comparison basis, we have observed that on an average almost 7 per cent stocks have managed to close above their 200-DMA, as in the month of August, average ratio of stocks trading above/ below their 200-DMA stood at 29:71, where on an average 29 per cent stocks were trading above their 200-DMA and on an average 71 per cent stocks were trading below their 200-DMA. In the coming weeks, we have to watch whether this marginal improvement in the average ratio was due to a pullback or we are nearing a bottom on a short term basis. 

Sectoral Sentiment Indicator : 

This indicator basically interprets the number of stocks in the sectoral indices trading above/below their 200-day moving averages. This indicator helps us to know which sectors are improving their performance. Indian markets resumed their downward momentum as benchmark index Nifty logged a hat-trick of losing sessions on Tuesday. On a week-on-week comparison basis, the sectoral index Nifty Realty has seen substantial decline as 30 per cent stocks have managed to close below their 200-DMAs, followed by Nifty Metal by 13.33 per cent and Nifty IT by 10 per cent. The Nifty Financial Services saw a marginal dip in the stock as only 5 per cent stocks have managed to close below the 200-day moving average. On the flip side, among the constituents of Nifty Private Bank, almost 10 per cent stocks have managed to close above their 200-DMAs, followed by 8.34 per cent and 6.25 per cent of Nifty Bank and Nifty Auto, respectively. 

The Nifty FMCG, Nifty Media, Nifty Pharma and Nifty PSU Bank indices remained unchanged on a week-on-week comparison. In fact, the Nifty PSU bank index has remained unchanged on a week-on-week comparison basis since seven weeks, but, last week, the stocks were trading below their 200-DMAs by about average of 22.39 per cent. However, in the current week, we saw further correction in the stocks by on an average 6.82 per cent. Alongside, the index itself is trading below its 200-DMA by 25.02 per cent, which indicates the Nifty PSU Bank is truly in pain. For the first time after July, the Nifty Realty index has seen substantial decline in current week, on a week-on-week comparison basis, last week the stocks were trading below their 200-DMAs by an average of 6.14 per cent, but in the current week, we have seen a further correction in the stocks by on an average 4.97 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 week-on-week comparison basis, the previous week's ratio was 21:13, and in the current week, the ratio was 13:28, where on-an-average 13 stocks touched new 52-week highs and 28 stocks hit 52-week lows. 

On September 26 and September 27, the average ratio was 18:15, where on average 18 stocks had touched 52-week high and 15 stocks had touched 52-week low, but on September 30 and October 01, we have seen not only there is significant addition in stocks marking 52-week low but also notable decline in stocks marking 52-week high as the average was 8:40 where the average eight stocks had touched new 52-week high and 40 stocks touched new 52-week low. Alongside, on Tuesday, we witnessed highest number of stocks making 52-week low since August 23. This clearly indicates that the Indian markets are not out of woods yet and selling pressure remained elevated in th e stocks after the big tax reform announced by FM turned to a thing of past.