SENTIMENT INDICATORS

200-DMA INDICATOR  [EasyDNNnews:PaidContentStart]

The 200-day moving average setup weakened marginally between June 24, 2026, and July 1, 2026, indicating continued softness in market breadth. The percentage of Nifty 50 stocks trading above their 200-DMA slipped from 42 per cent to 40 per cent, while the share of stocks trading below this long-term average increased from 58 per cent to 60 per cent. During the same period, the Nifty declined marginally by 0.07 per cent, suggesting that the index remained largely stable but broader participation stayed weak. The reading remains below the half way mark, showing that the recovery is still selective and lacks broad-based confirmation. This reflects a cautious underlying setup, as a larger portion of index constituents continue to trade below their long-term trend indicator. At the stock level, Bajaj Auto and Maruti crossed above their 200-DMA, offering pos itive trend signals. However, Bharti Airtel, Eicher Motors, and JSW Steel slipped below their 200-DMA, indicating renewed weakness in select index constituents. Overall, the latest reading points to a mildly weak breadth setup. For a stronger recovery signal, the percentage of stocks above the 200-DMA needs to move back above 50 per cent, while fresh breakdowns should remain limited. 

SECTORAL SENTIMENT INDICATOR 

The sectoral 200-DMA breadth as of July 1, 2026, shows a selective market participation setup compared with the previous reading. While a few sectors continue to trade comfortably above their long-term trend line, weakness remains visible in several pockets. Nifty Pharma remains the strongest sector, with 95 per cent of its constituents trading above the 200-DMA, supported by a further 5 percentage point improvement. Nifty Private Bank and Nifty Realty also continue to stand out, with 80 per cent of their stocks above the 200-DMA, though both readings remained unchanged from the previous week. Nifty Auto showed an encouraging improvement, rising to 53.33 per cent above the 200-DMA after a 6.67 percentage point increase. This helped the sector move back above the halfway mark, indicating some revival in participation. Nifty Bank stayed at the neutral level, with 50 per cent of its stocks trading above the 200-DMA, suggesting that banking breadth has remained stable but has not strengthened further. Nifty Financial Services also remained unchanged at 45 per cent, keeping it slightly below the halfway mark. On the weaker side, Nifty PSU Bank saw further deterioration, with stocks above the 200-DMA falling to 16.67 per cent after an 8.33 percentage point decline. Nifty Metal witnessed the sharpest weakness, slipping to 20 Sectoral Sentiment Indicator per cent, down 20 percentage points from the previous reading. This indicates that selling pressure has intensified in the metal space. The weakest pockets remain Nifty IT and Nifty Metal at 20 per cent each. Nifty FMCG stayed unchanged at 33.33 per cent, while Nifty Media also remained steady at 40 per cent, reflecting limited participation. Overall, the latest reading points to a narrow and selective sectoral breadth setup, led by Pharma, Private Bank, Realty, and improving Auto. For stronger confirmation, more sectors need to sustain above the 50 per cent mark. 

Indicator To Gauge Internal Strength 

This indicator measures the underlying strength of the broader market by tracking how many Nifty 500 stocks are hitting fresh 52-week highs versus those falling to fresh 52-week lows. A healthy market usually sees a steady rise in new highs, supported by limited new lows. On the other hand, a rise in new lows alongside new highs points to mixed participation and stock-specific divergence. As per the latest reading, the Nifty 500 moved marginally lower from 23,126.3 on June 24, 2026, to 23,111.7 on July 1, 2026, registering a slight decline of 0.06 per cent. During the same period, stocks touching fresh 52-week highs increased sharply from 1 to 9, while fresh 52-week lows also rose from 1 to 7. This suggests that broader market participation has improved on the upside, but weakness has also started appearing in select pockets. The rise in fresh 52-week highs shows that leadership is expanding again, which is a positive sign. However, the simultaneous increase in 52-week lows indicates that the broader market is not uniformly strong, and some stocks continue to face selling Indicator to gauge internal strength pressure. Overall, the latest reading points to a mixed internal market strength setup. While the expansion in fresh highs reflects improving participation, the rise in fresh lows keeps the signal cautious. For sentiment to turn stronger, fresh highs should continue to expand decisively, while fresh lows need to cool off meaningfully. 

[EasyDNNnews:PaidContentEnd] [EasyDNNnews:UnPaidContentStart]

To read the entire article, you must be a FNI Weekly Subscriber.

[EasyDNNnews:UnPaidContentEnd]