Sentiment Indicators.

200-DMA INDICATOR :
This indicator measures the percentage of Nifty 50 stocks that are trading above/below their 200-day simple moving averages. The 200-DMA is considered important as it is one of the basic technical indicators that can be used to determine the long-term trend of a security. Almost 42 per cent of the stocks that constitute Nifty 50 equity benchmark index are trading above their 200-DMAs while 58 per cent of the stocks are trading below the 200-DMA. On a weekly basis, we observed that there was a net change of 6 per cent of Nifty stocks rising above their 200-DMA, which is a positive sign. In the last five trading sessions, Asian Paints, Axis Bank, L&T and IndusInd Bank surged above their 200-DMA while Tata Motors plunged below its key indicator. Yet another week, Nifty has continued its road to recovery. Since last Wednesday's close of 16,520, the benchmark index has rallied 121 points or 0.73 per cent. This week, Nifty saw resistance at higher levels as it fell nearly 300 points from its week's high of 16,752. It was quite expected that Nifty would see some profit booking post last week's blusterous run. Also, buying tends to be muted ahead of Fed meetings. Nevertheless, the index saw a fantastic recovery from lower levels on Wednesday as it soared about 200 points from its intraday low. To add further, some companies like Axis Bank, Bajaj Finance, Asian

Paints, L&T, and Maruti Suzuki posted robust quarterly numbers, which lifted market sentiment. All in all, Nifty looks resilient to bad cues and further recovery is in line next week. That being said, the difference between the index close and 200-DMA currently stands at negative 2.3 per cent, which was negative 3.16 per cent last week. Slowly but steadily, we can see this difference is closing in, which means that Nifty is on its path to a stronger recovery. Heading onto the next week, we can expect more stocks to participate in Nifty's rally, which can propel the index to the 16,800 level

Sectoral Sentiment Indicator :
This indicator basically interprets the number of stocks in the sectoral indices that are trading above/below their 200-day moving averages. This will help us to know which sectors are improving their performance. It was a good week for the sectoral indices as most of them ended positively on a WoW basis. Among the sectoral indices, Nifty Auto, Nifty PSU Bank & Nifty FMCG are currently above their 200-DMA with Nifty Bank and Nifty Private Bank being the latest entrants to this list. On a WoW comparison basis, Nifty Private Bank saw a maximum of about 10 per cent of its constituents surging above the 200-DMA. Meanwhile, Nifty Bank witnessed about 8.33 per cent of its constituents rising above the key indicator. However, almost 10 per cent of the constituents of Nifty Pharma and Nifty Realty plunged below their 200-DMA. Also, Nifty FMCG and Nifty Metal saw this number to be at a negative 6.67 per cent each. Meanwhile, Nifty Auto, Nifty Financial Services, Nifty IT, Nifty Media, and Nifty PSU Bank saw no change in their constituents crossing above/below the key indicator. This week, most of the sectors performed well as the market sees value-buying emerging.

Both financials and media showed a good rally after FIIs turned out to be net buyers for a few days. Nifty Media jumped nearly 4 per cent while Nifty Bank rose 1.50 per cent since last Wednesday's close. We can expect these sectors to continue their dominance in the coming week. However, Nifty Auto saw profit-booking after a decent run in the past few weeks. Now, since that focus has been shifted to other sectors, one should stay cautious against Nifty Auto until it crosses above its prior swing high

Indicator To Gauge Internal Strength :
This indicator helps us to gauge the internal strength of the market. Among Nifty 500 stocks, a higher number of stocks reaching 52-week highs and the lesser number of stocks hitting 52-week lows represent a bull market while the opposite, suggests a bear market. On a WoW comparison basis, the average ratio of stocks marking a fresh 52-week high/low last week was 8:3 while this week, the ratio stood at 10:3. On a WoW basis, on average, ten stocks hit their fresh 52-week high whereas on the flip side, on average, about three stocks have touched new 52-week lows. The broader index Nifty 500 jumped 96 points or 0.67 per cent in the last five trading sessions. It traded with volatility as traders booked profit ahead of the Fed event but also, saw a buying opportunity at lower levels. Interestingly, Nifty 500 index formed a nearly equal bullish candle on Wednesday as it had formed a bearish candle in the previous trading session. We can see strong supports placed at lower levels while the downside seems to be less likely for now. Also, an increase in the average number of stocks

hitting fresh 52-week high shows that the internal strength is improving thereby, aligning with the same conclusion of stronger internal strength. Also, at a monthly level, the improvement has been quite significant as this ratio stood at 1:22 in June, which is now 5:2 in July. This means that the broader market has probably bottomed out and the path from here on must be upwards