SENTIMENT INDICATORS

200-DMA INDICATOR  [EasyDNNnews:PaidContentStart]
 

The 200-day moving average setup weakened between August 5, 2026, and August 12, 2026, signalling some deterioration in market breadth for the benchmark index. The percentage of Nifty 50 stocks trading above their 200-DMA declined from 66 per cent to 60 per cent, while the share trading below this long term average increased from 34 per cent to 40 per cent. During the same period, the Nifty fell 0.77 per cent, indicating that the index decline was accompanied by weaker participation among its constituents. Despite the moderation, three-fifths of the index stocks remain above their 200-DMA, suggesting that the broader long-term structure is still relatively constructive. At the stock level, Infosys crossed above its 200-DMA during the period, providing one positive breadth signal. However, Adani Ports, Max Healthcare, SBI Life and TMPV crossed below their respective 200-DMAs, showing that negative crossovers clearly outnumbered positive ones and added pressure to the broader setup. Overall, the latest reading points to a contraction in market breadth, with the balance of fresh crossovers turning negative during the week. For the trend to remain constructive, the percentage of stocks above the 200-DMA should continue to hold above the 50 per cent mark, while recent negative crosso vers need to stabilise and key index constituents must reclaim their respective long-term averages in coming sessions. 

SECTORAL SENTIMENT INDICATOR 

The sectoral 200-DMA breadth as of August 12, 2026, reflects a mixed market structure, with strength concentrated in select sectors while participation weakened across several others. Nifty IT and Nifty Pharma emerged as the strongest sectors, with 90 per cent of their constituents trading above the 200 DMA. Nifty IT improved by 10 percentage points during the week, while Nifty Pharma declined by 5 percentage points but continued to maintain strong long-term breadth. Nifty Auto also remained relatively strong, with 80 per cent of its constituents above the 200-DMA, although the reading declined by 6.67 percentage points. The Banking space showed improvement. Nifty Bank rose by 8.33 percentage points to 75 per cent, while Nifty PSU Bank recorded the strongest weekly improvement, increasing by 16.67 percentage points to 66.67 per cent. Nifty Private Bank remained unchanged at 70 per cent. Among other sectors, Nifty Realty declined by 10 percentage points to 70 per cent, while Nifty Metal slipped by 6.67 percentage points to 66.67 per cent. Despite the decline, both sectors continued to show a majority of constituents above their long-term moving averages. Nifty Financial Services weakened by 10 percentage points to 45 per cent, slipping below the important 50 per cent mark. Nifty Media saw the sharpest deterioration, falling by 20 percentage points to 50 per cent. Nifty FMCG remained unchanged at 33.33 per cent, making it the weakest sector in terms of 200-DMA breadth. Overall, sectoral breadth has turned more selective. IT, Pharma, Auto and banking indices continue to provide support, while weakness in Financial Services, Media, Realty and Metal points to narrowing participation. A recovery in FMCG and Financial Services, together with stability in sectors holding above the 50 per cent level, would help improve the broader technical structure. 

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 a steady rise in new highs along with a limited number of new lows. When fresh highs remain elevated while lows stay subdued, it signals broader participation and stronger market internals. According to the latest reading in the chart, the Nifty 500 declined from 23,735.55 on August 5, 2026, to 23,672.45 on August 12, 2026, registering a fall of 0.27 per cent. During the same period, the number of stocks touching fresh 52-week highs slipped from 9 to 7, while the number of stocks hitting fresh 52-week lows increased from zero to 3. This suggests that the broader market witnessed some moderation in internal strength during the week. The decline in fresh 52-week highs indicates that fewer stocks were able to move into higher price territory, while the emergence of three fresh 52-week lows points to some increase in selling pressure. However, with new highs still outnumbering new lows, the deterioration in breadth remains relatively contained rather than signalling widespread weakness. Overall, the latest reading points to a mild weakening in the market’s internal structure. The modest decline in the Nifty 500, combined with fewer fresh highs and an increase in fresh lows, suggests that participation has softened compared with the previous week. For market breadth to improve again, the number of stocks registering fresh 52-week highs should begin to rise, while fresh 52-week lows need to decline and remain limited.

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