SENTIMENT INDICATORS

This indicator measures the percentage of Nifty 50 stocks that are trading above/below their 200-day simple moving averages [EasyDNNnews:PaidContentStart]

200-DMA INDICATOR

The 200-day moving average setup weakened further between August 12, 2026, and August 19, 2026, signalling continued deterioration in market breadth for the benchmark index. The percentage of Nifty 50 stocks trading above their 200-DMA declined from 60 per cent to 54 per cent, while the share trading below this long-term average increased from 40 per cent to 46 per cent. During the same period, the Nifty fell 1.46 per cent, indicating that the decline in the index was accompanied by weakening participation among its constituents. Despite the moderation, more than half of the index stocks continue to trade above their 200-DMA, keeping the broader long-term structure marginally constructive. At the stock level, there were no fresh positive crossovers above the 200-DMA during the period. In contrast, Infosys, TCS and UltraTech Cement crossed below their respective 200-DMAs, indicating that the balance of fresh crossovers remained firmly negative and contributed to the weakening breadth setup. Overall, the latest reading points to another contraction in market breadth as the gap between stocks above and below the 200-DMA narrowed further. For the broader trend to remain constructive, the proportion of stocks above the 200-DMA needs to hold above the 50 per cent mark, while recent negative crossovers need to stabilise and key index constituents should reclaim their long-term averages in the coming sessions.

SECTORAL SENTIMENT INDICATOR

The sectoral 200-DMA breadth as of August 19, 2026, reflects a weaker and increasingly selective market structure, with deterioration visible across several key sectors. Nifty Auto emerged as the strongest sector, with 86.67 per cent of its constituents trading above the 200-DMA. It was also the only sector to record a meaningful improvement during the week, rising by 6.67 percentage points and maintaining strong longterm breadth. Nifty Pharma and Nifty IT remained among the stronger sectors, with 75 per cent and 70 per cent of their constituents, respectively, trading above the 200-DMA. However, both witnessed notable deterioration during the week. Nifty IT declined by 20 percentage points, while Nifty Pharma slipped by 15 percentage points, indicating weakening participation despite remaining comfortably above the 50 per cent mark. The Banking space also saw pressure. Nifty Bank declined by 8.33 percentage points to 66.67 per cent, while Nifty Private Bank remained unchanged at 70 per cent. Nifty PSU Bank recorded the sharpest deterioration among all sectors, falling by 33.33 percentage points to 33.33 per cent, pushing its breadth firmly below the 50 per cent threshold. Among other sectors, Nifty Metal declined by 13.33 percentage points to 53.33 per cent, while Nifty Realty remained unchanged at 70 per cent. Nifty Financial Services slipped by 5 percentage points to 40 per cent, continuing to remain below the important 50 per cent level. Nifty FMCG remained unchanged at 33.33 per cent, making it one of the weakest sectors in terms of long-term breadth, while Nifty Media stayed flat at 50 per cent. Overall, sectoral breadth weakened during the week, with Auto standing out as the key area of strength. The sharp deterioration in PSU Bank, IT, Pharma and Metal points to narrowing participation. Stability in sectors still holding above the 50 per cent mark, along with a recovery in Financial Services, FMCG and PSU Bank, would be necessary to 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 23,672.45 on August 12, 2026, to 23,386.20 on August 19, 2026, registering a fall of 1.21 per cent. During the same period, the number of stocks touching fresh 52-week highs declined from 7 to 4, while the number of stocks hitting fresh 52-week lows also decreased from 3 to 1. This suggests that the broader market witnessed further 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, reflecting weaker upside participation. At the same time, the drop in fresh 52-week lows from three to one suggests that selling pressure was not broad-based. With new highs continuing to outnumber new lows, the market breadth remains weak but does not indicate widespread deterioration. Overall, the latest reading points to a softer internal market structure. The 1.21 per cent decline in the Nifty 500, accompanied by fewer fresh highs, suggests that bullish participation weakened further during the week. However, the simultaneous reduction in fresh 52-week lows provides some support to the broader setup. For market breadth to improve, the number of stocks registering fresh 52-week highs should begin to rise consistently, while fresh 52-week lows need to remain limited.

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