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 showed signs of improvement between September 16, 2026, and September 23, 2026, indicating a recovery in market breadth after the sharp weakness seen earlier in the month. The percentage of Nifty 50 stocks trading above their 200-DMA increased from 18 per cent to 28 per cent, while the proportion of stocks trading below this key long-term average declined from 82 per cent to 72 per cent. Although the breadth profile remains weak, the latest movement suggests that some index constituents have started reclaiming their long-term moving averages. However, with nearly three-fourths of Nifty 50 stocks still trading below their 200-DMA, the broader market structure continues to remain under pressure. At the stock level, Adani Ports, HDFC Life Insurance, InterGlobe Aviation, JSW Steel and Max Healthcare Institute moved above their respective 200-DMAs during the period. Notably, no Nifty 50 constituent crossed below its 200-DMA, indicating an improvement in the balance of positive and negative crossovers. The presence of five positive crossovers against no negative crossover suggests that buying interest has returned selectively across Large-Cap stocks. However, the number of stocks trading above their long-term averages remains relatively low compared with those trading below them. Overall, the latest reading points towards a modest improvement in the Nifty 50’s long-term breadth profile, with the percentage of stocks trading above the 200-DMA recovering from its recent low. However, the reading remains well below the crucial 50 per cent mark, suggesting that the improvement is still at an early stage. For the breadth structure to strengthen further, more index constituents will need to reclaim and sustain above their 200-DMAs in the coming sessions.

SECTORAL SENTIMENT INDICATOR

The sectoral 200-DMA breadth as of September 23, 2026, showed a broad improvement in market participation, with most major sectors witnessing an increase in the percentage of stocks trading above their long-term moving averages. The recovery was particularly visible across metal, realty, PSU Banks and defensive segments. However, participation remained uneven, as a few sectors continued to have a majority of their constituents trading below the 200-DMA, indicating that the overall breadth recovery is still developing. Among the major sectoral indices, Nifty Pharma emerged as the strongest segment, with 70 per cent of its constituents trading above the 200-DMA, improving by 10 percentage points during the period. Nifty Realty also showed notable strength, with breadth rising by 30 percentage points to 60 per cent. Nifty Auto improved by 6.67 percentage points, with 53.33 per cent of its constituents trading above their long-term averages. Nifty Metal recorded one of the sharpest improvements, rising by 33.33 percentage points to 53.33 per cent. Nifty Media also strengthened by 10 percentage points to 50 per cent. The financial space witnessed a mixed but improving trend during the period. Nifty Bank remained unchanged, with 33.33 per cent of its constituents trading above the 200-DMA. Nifty Financial Services improved by 10 percentage points to 30 per cent, while Nifty Private Bank remained steady at 50 per cent. Nifty PSU Bank recorded a stronger recovery, with the proportion of stocks above the 200-DMA rising by 16.67 percentage points to 33.33 per cent. Despite these gains, participation across the broader financial space remained below the halfway mark in several indices. Among other sectors, Nifty FMCG recorded an improvement of 13.33 percentage points, although only 20 per cent of its constituents were trading above the 200-DMA, leaving it with the weakest breadth among the sectors tracked. In contrast, Nifty IT was the only major sector to witness deterioration, with the percentage of stocks above the 200-DMA declining by 20 percentage points to 40 per cent. Overall, sectoral breadth improved considerably during the period, supported by stronger participation in metal, realty, PSU banks, pharma and auto stocks. However, weakness in IT and relatively low breadth across FMCG and financial services indicate that the recovery remains selective. A sustained increase in the number of stocks holding above their 200-DMAs across a wider range of sectors would provide stronger confirmation of an improvement in the broader market structure.

Indicator To Gauge Internal Strength

This indicator evaluates the underlying strength of the broader market by tracking the number of Nifty 500 stocks touching fresh 52-week highs and fresh 52-week lows. A rise in stocks making new highs along with a moderation in fresh lows generally reflects improving market breadth and stronger participation. On the other hand, a decline in new highs combined with an increase in new lows indicates weakening internal strength and greater selling pressure across individual stocks. According to the latest reading, the Nifty 500 increased from 22,532 on September 16, 2026, to 22,935.10 on September 23, 2026, registering a gain of 1.79 per cent. During the same period, the number of stocks touching fresh 52-week highs remained at 0, while the number of stocks making fresh 52-week lows declined from 3 to 0. The latest data indicates some improvement in broader market conditions, as the rise in the index was accompanied by the complete absence of stocks entering fresh 52-week low territory. The decline in new lows suggests that selling pressure has eased considerably across the broader market during the period. However, the continued absence of fresh 52-week highs indicates that the recovery has yet to translate into stronger upside participation, with relatively few stocks demonstrating sufficient momentum to reach new annual highs. Overall, the latest reading points towards a stabilising market structure, with the Nifty 500 recovering while downside breadth showed meaningful improvement. The absence of fresh 52-week lows indicates reduced weakness among individual stocks, although the lack of fresh highs continues to reflect limited market leadership. A sustained improvement in internal market strength would require the Nifty 500’s recovery to be accompanied by a gradual increase in stocks making fresh 52-week highs while new low formation remains contained.

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