SENTIMENT INDICATORS

200-DMA INDICATOR  [EasyDNNnews:PaidContentStart]

The 200-day moving average (DMA), a key gauge of long term market breadth, showed a clear improvement in the Nifty 50’s internal strength over the past week. Between December 17, 2025, and December 23, 2025, the number of Nifty constituents trading above their 200-DMA increased from 62 to 70, while those trading below declined from 38 to 30. This improvement in participation came despite the Nifty ending the period lower by 0.31 per cent, highlighting a divergence between index-level performance and underlying stock-level strength. Stock-level movements reinforce this improving undertone. Coal India, TCS, and TMPV managed to close above their respective 200-DMAs during the week, signalling selective recovery in leadership across Large-Cap and defensive pockets. Importantly, there were no major breakdowns among index heavyweights, suggesting that recent weakness is giving way to stabilisation rather than further deterioration. From

an investor’s perspective, improving 200-DMA participation amid a muted index often indicates a base-building phase, where selective accumulation precedes a clearer directional move.

SECTORAL SENTIMENT INDICATOR

The sectoral 200-day moving average (200-DMA) indicator for December 23, 2025, reflects a modest but broad-based improvement in market breadth, with selective sectors showing renewed participation. Nifty IT recorded a 10 per cent point rise in stocks trading above the 200-DMA, indicating a recovery in internal strength after recent pressure. Nifty Financial Services, however, showed no change on a week-on week basis, signalling consolidation rather than fresh expansion within the broader financial space. Nifty Auto remained one of the stronger performers, with a 13.33 per cent increase in breadth, highlighting sustained buying interest in cyclical names. Nifty Metal also recorded no change but continued to display strong participation, with a majority of stocks holding above their long-term averages. Nifty Bank and Nifty Private Bank remained unchanged as well, suggesting stability at relatively healthy breadth levels. On the positive side, Nifty Realty witnessed a 10 per cent point improvement, indicating a recovery in participation after prolonged weakness. Nifty FMCG also saw a 6.66 per cent rise in breadth, pointing to 

renewed defensive accumulation. Nifty Pharma improved by 5 percentage points, reinforcing its defensive appeal, while Nifty Media remained under pressure, reflecting persistent structural weakness. Overall, the sectoral breadth picture suggests gradual improvement beneath a range-bound index. Participation is broadening across IT, autos, Realty, and FMCG, while financials remain stable. This environment continues to favour a selective, stock-specific approach rather than aggressive sector-level positioning. 

Indicator To Gauge Internal Strength

The internal market strength indicator, which tracks the number of Nifty 500 stocks hitting fresh 52-week highs versus those falling to new 52-week lows, continues to reflect a cautious and indecisive setup. Between December 11, 2025, and December 17, 2025, the number of stocks recording new 52-week highs increased from 1 to 2, indicating limited improvement in upside participation. However, this was matched by a rise in new 52-week lows from 1 to 2, highlighting that downside pressure persists in select pockets. During the same period, the Nifty 500 index declined by 0.23 per cent, slipping from 23,550.85 to 23,496.05. The combination of a marginal index decline and a balanced rise in both new highs and new lows points to a market lacking strong directional conviction. While selective buying interest is visible, the absence of a meaningful expansion in new highs suggests 

that broader participation remains constrained. For a healthier internal structure to emerge, the market would need to see a sustained increase in new highs alongside a contraction in new lows, confirming stronger and more durable participation on the upside.

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