SENTIMENT INDICATORS

200-DMA INDICATOR [EasyDNNnews:PaidContentStart]

The 200-day moving average setup improved further between July 29, 2026, and August 5, 2026, signalling strengthening market breadth for the benchmark index. The percentage of Nifty 50 stocks trading above their 200-DMA increased from 58 per cent to 66 per cent, while the share trading below this long-term average declined from 42 per cent to 34 per cent. During the same period, the Nifty gained 1.54 per cent, suggesting that the index advance was backed by improving participation among its constituents. With nearly two-thirds of the index stocks now trading above their 200-DMA, the broader market structure has strengthened further and reflects a positive long-term trend. At the stock level, Hindalco Industries, Larsen & Toubro, State Bank of India and TMPV crossed above their respective 200-DMA during the period, adding to the positive breadth signals. Importantly, no Nifty 50 stock crossed below its 200-DMA, indicating that the improvement was not accompanied by any fresh long-term technical breakdowns. Overall, the latest reading indicates a further expansion in market breadth, with positive crossovers continuing to dominate the setup. For the trend to remain constructive, the percentage of stocks above the 200-DMA should sustain well above the 50 per cent mark, while recent positive crossovers and heavyweight constituents need to hold above their respective longterm averages.

SECTORAL SENTIMENT INDICATOR

The sectoral 200-DMA breadth as of August 5, 2026, continues to reflect a broadly constructive market structure, with several key sectors maintaining strong participation above their longterm moving averages. Nifty Pharma remained the strongest segment, with 95 per cent of its constituents trading above the 200-DMA, unchanged from the previous week. Nifty Auto followed at 86.67 per cent, improving by 13.33 percentage points, while Nifty IT and Nifty Realty remained steady at 80 per cent each. Nifty Metal recorded the sharpest improvement during the week, rising by 40 percentage points to 73.33 per cent. The significant jump indicates a broadening of participation across metal stocks. Nifty Private Bank and Nifty Media also continued to display healthy breadth, with 70 per cent of their constituents trading above the 200-DMA. The banking space strengthened further during the week. Nifty Bank improved by 8.33 percentage points to 66.67 per cent, supporting the positive long-term structure among banking stocks. Nifty PSU Bank also witnessed a notable recovery, rising by 25 percentage points to 50 per cent, bringing half of its constituents above the 200-DMA. However, Nifty Financial Services slipped by 5 percentage points to 55 per cent, though it remained above the important 50 per cent threshold. On the weaker side, Nifty FMCG recorded the sharpest deterioration, declining by 13.33 percentage points to 33.33 per cent. This made FMCG the weakest sector in terms of 200-DMA breadth and reflected reduced participation across the segment. Overall, sectoral breadth remains constructive, led by Pharma, Auto, IT, Realty, Metal, Private Bank and Media. The sharp improvement in Metal and PSU Bank, along with continued strengthening in Nifty Bank, adds support to the broader market structure. Going forward, a recovery in FMCG towards the 50 per cent mark and stability in Financial Services would further strengthen the breadth picture.

Indicator To Gauge Internal Strength

This indicator evaluates the underlying strength of the broader market by comparing the number of Nifty 500 stocks touching fresh 52-week highs with those slipping to fresh 52-week lows. A healthy market generally sees an increase in new highs along with a limited number of new lows. When fresh highs expand while lows remain subdued, it indicates broader participation and improving strength across the market. According to the latest reading in the chart, the Nifty 500 advanced from 23,352.6 on July 29, 2026, to 23,735.55 on August 5, 2026, registering a gain of 1.64 per cent. During the same period, the number of stocks touching fresh 52-week highs increased from 5 to 9, while the number of stocks hitting fresh 52-week lows remained at zero. This suggests that the broader market continued to build upward momentum during the week. The increase in fresh 52-week highs indicates that a larger number of stocks participated in the rally and moved into higher price territory. More importantly, the continued absence of fresh 52-week lows shows that selling pressure remained limited and weakness did not spread across the broader market despite intermittent volatility. Overall, the latest reading points to a further improvement in the market’s internal structure. The simultaneous rise in the Nifty 500 and expansion in fresh 52-week highs, coupled with zero fresh lows, indicates healthy participation and sustained buying interest. For this positive breadth trend to strengthen further, the number of stocks registering fresh 52-week highs should continue to increase, while fresh lows need to remain limited or stay close to zero.

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