SENTIMENT INDICATORS

200-DMA INDICATOR[EasyDNNnews:PaidContentStart]
The 200-day moving average (DMA), a key gauge of longterm market breadth, reflected continued softening in the Nifty 50’s internal strength over the past week. Between December 24, 2025, and December 31, 2025, the number of Nifty constituents trading above their 200-DMA declined from 64 to 62, while those trading below the long-term trendline increased from 36 to 38. This deterioration in breadth came alongside a marginal decline of 0.31 per cent in the Nifty, indicating that selling pressure remains moderately broad-based rather than restricted to a few heavyweight stocks. Stock-level movements reinforce this cautious undertone. TCS, a key IT sector constituent, slipped below its 200-DMA during the week, signalling renewed weakness within the IT space after a brief phase of stabilisation. The lack of fresh upside crossovers, coupled with incremental breakdowns in select Large-Cap names, suggests that internal participation remains fragile. From an investor’s perspective, a declining 

proportion of stocks holding above the 200-DMA calls for a selective approach, favouring stocks that continue to maintain long-term trend support while remaining cautious on those losing this critical level. Such conditions often precede phases of consolidation or corrective price action before a clearer directional trend emerges. 

SECTORAL SENTIMENT INDICATOR
The sectoral 200-day moving average (200-DMA) indicator for December 31, 2025, reflects a mixed but selective undertone in market breadth, with divergence emerging across key sectors. Nifty IT recorded a 10 percentage point decline in stocks trading above the 200-DMA, underscoring renewed weakness in the sector and aligning with recent breakdowns among large-cap IT stocks. This suggests that the sector continues to struggle to regain sustained long-term momentum. Most financial segments remained largely stable. Nifty Bank, Nifty Financial Services, Nifty Private Bank, and Nifty PSU Bank showed no meaningful change on a week-onweek basis, indicating consolidation at existing breadth levels rather than fresh accumulation or deterioration. Nifty Auto and Nifty Metal also recorded no change, suggesting a pause after earlier improvements. On the positive side, Nifty FMCG emerged as a relative outperformer, with the proportion of stocks trading above the 200-DMA rising by 13.33 per cent compared to last week. This improvement indicates renewed defensive accumulation and highlights the sector’s ability to attract buying interest amid broader market uncertainty. Nifty Media also showed strength, registering a 20 percentage point improvement in breadth, pointing to selective accumulation 

within the sector. On the weaker side, Nifty Realty witnessed a sharp 20 percentage point decline in stocks trading above the 200-DMA, highlighting renewed selling pressure and loss of long-term trend support. Nifty Pharma saw a mild decline of 5 percentage points, suggesting some unwinding of defensive positions after recent strength. Overall, the sectoral breadth picture suggests narrowing leadership, with strength concentrated in FMCG and Media, stability in financials, and weakness persisting in IT and Realty. This reinforces a selective, stock-specific environment rather than a broad-based sectoral trend. 

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, points to a marginal improvement in market tone. Between December 24, 2025, and December 31, 2025, the number of stocks recording new 52-week highs declined from 7 to 2, while new 52-week lows remained unchanged at zero. This shift indicates reduced upside momentum but also an absence of fresh downside stress. During the same period, the Nifty 500 index edged higher by 0.09 per cent, rising from 23,850.25 to 23,871.55. The combination of a modest index gain, fewer new highs, and no expansion in new lows suggests a consolidative market phase rather than a decisive directional move. While the lack of new lows is a positive sign, the sharp drop in new highs highlights limited participation on the upside. Overall, the internal market structure remains cautious but stable. For 

a stronger and more durable bullish undertone to emerge, the market would need to see a sustained expansion in new 52-week highs while maintaining containment of new lows. Until then, the broader setup continues to favour a selective, risk-managed approach focused on stocks demonstrating consistent relative strength. 

(Closing price as of December 31, 2025) 


*LEGEND: ▪️ DMA - Daily Moving Average. ▪️ MACD - Moving Average Convergence Divergence ▪️ RMI - Relative Momentum Index ▪️ ROC - Rate of Change ▪️ RSI - Relative Strength Index

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