A Buying Day: Sectors Led, and Breadth Now Needs Follow-Through
367 Nifty 500 stocks rose against 132 that fell, but most stocks are still under their 20-day average.
Nifty 500 had 367 advancers against 132 decliners on 13 October. The day before it was 266 against 232. Net advances-minus-declines jumped from 34 to 235, a change of +201 in one session. That is a buying day, and a clear one.
What I want to separate is a buying day from a broad recovery. Today we have the first. For the second, the data needs more than one session, and it needs the move to reach the broad indices, not only a few sectors.
I used four views in the IndexBreadth rolling table, all comparing the latest session with the previous one: share of stocks above their 20-day average, share with improving momentum, share up 5% or more over the recent look-back, and net advances minus declines.
The biggest change came in the sectors
The share of stocks above the 20-day average moved most in sector indices, not in the broad ones.
| Index | Above 20-day avg, now | Previous | Change (pts) |
|---|---|---|---|
| Nifty IT | 90% | 40% | +50 |
| Nifty Realty | 30% | 0% | +30 |
| Nifty PSU Bank | 41.7% | 25% | +16.7 |
| Nifty Financial Services | 50% | 40% | +10 |
| Nifty Media | 60% | 50% | +10 |
| Nifty Consumption | 16.7% | 6.7% | +10 |
| Nifty Bank | 42.9% | 35.7% | +7.1 |
| Nifty Auto | 6.7% | 0% | +6.7 |
| Nifty FMCG | 20% | 13.3% | +6.7 |
IT is the standout: nine out of ten stocks are now above the 20-day average, up from four. Realty went from none to a third. A small note on reading these: these sector indices hold about 10 to 15 stocks, so a few names moving can shift the percentage a lot. That is why I read them together with the broad indices below.
Broad indices improved, but from a low base
| Index | Above 20-day avg, now | Previous | Change (pts) |
|---|---|---|---|
| Nifty Midcap 50 | 26% | 14% | +12 |
| Nifty 50 | 24% | 14% | +10 |
| Nifty 100 | 25% | 15% | +10 |
| Nifty 200 | 29.5% | 20% | +9.5 |
| Nifty Midcap 100 | 31% | 22% | +9 |
| Nifty Next 50 | 24% | 16% | +8 |
| Nifty LargeMidcap 250 | 27.6% | 20% | +7.6 |
| Nifty 500 | 28.4% | 21.4% | +7 |
| Nifty Total Market | 29.1% | 22.5% | +6.6 |
| Nifty Smallcap 500 | 30% | 23.5% | +6.5 |
Every broad index went up, by 6 to 12 points. But look at the levels. Even after the jump, only about one stock in four is above its 20-day average in the Nifty 50, Nifty 100 and Nifty 500. In the Nifty 50, 16% are above the 50-day average and 20% above the 200-day average. The index is still in a pullback, with a strong bounce inside it.
Momentum: more stocks are trending up
The share of stocks with improving momentum rose in the same places. Nifty IT went from 30% to 90%, Realty from 0% to 30%, Auto from 0% to 13.3%. Among broad indices, Nifty 50 and Nifty 100 each gained 10 points (to 24% and 25%), Midcap 50 gained 8 (to 30%), and Smallcap 50 gained 8 (to 44%).
The share of stocks that have gained 5% or more over the recent look-back also rose across the board. IT went from 20% to 60% and Media from 30% to 40%. In the broad indices, the Nifty 50 doubled from 6% to 12%, and the Nifty 500 went from 5.6% to 9.8%. So the move was not only a one-day price jump in a few names; more stocks now carry real upward momentum. Still, 9.8% of the Nifty 500 is about one stock in ten, so most stocks are not there yet.
Net advances minus declines: the broadest signal today
| Index | Net A-D, now | Previous |
|---|---|---|
| Nifty Total Market | +288 | +87 |
| Nifty 500 | +235 | +34 |
| Nifty MidSmallcap 400 | +163 | +47 |
| Nifty LargeMidcap 250 | +154 | -17 |
| Nifty Smallcap 500 | +145 | +98 |
| Nifty 200 | +132 | -15 |
| Nifty Midcap 150 | +82 | -4 |
| Nifty Smallcap 250 | +81 | +51 |
| Nifty 100 | +72 | -13 |
| Nifty Midcap 100 | +60 | -2 |
| Nifty 50 | +42 | -23 |
This is the part I like most about today. Net A-D flipped from negative to positive in the Nifty 50, Nifty 100, Nifty 200, Midcap 100 and Midcap 150 in a single session. Small caps were already positive the day before and added to it. That is participation across the cap range, not only a large-cap move.
Extremes eased
Oversold stocks fell from 10.6% to 4.4% of the Nifty 500, and from 10% to 4% in the Nifty 50. Overbought stocks are still close to zero, at 0.6% in the Nifty 500. Stocks at 20-day highs (7%) now slightly outnumber those at 20-day lows (6%), where the day before it was 4% highs and 15% lows. Net 3-month momentum in the Nifty 500 improved from -51 to -42.
So, what is today?
My read: a buying day with broad participation in advances, led by sector moves, and not yet a trend change.
- What is strong: net A-D of +235 in the Nifty 500, a +201 swing in one day. Sector breadth jumped in IT, Realty and PSU Bank. Oversold readings dropped by more than half.
- What is missing: 72% of the Nifty 500 is still under its 20-day average, and about four in five are under the 50-day. A single session does not repair that.
- The test: the move has to spread. Until the share above the 20-day average rises in the broad indices (Nifty 50, Nifty 500, Midcap 100) the way it did in the sectors, I would call it a buying day and nothing more.
What I am watching next
- Whether the Nifty 500 share above its 20-day average moves past 30% and stays there for more than one session.
- Whether net A-D stays positive on the next session in the Nifty 50, Nifty 200 and Midcap 150, the indices that only just turned.
- Whether IT’s 90% holds, or fades the way short bursts did earlier this month.
- The overbought share starting to rise from near zero, which would show participation building.
- Whether the share of stocks at 20-day highs keeps staying ahead of those at 20-day lows.
This is market context for study, not a signal for any action.
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Lovelesh Sharma
SEBI Registered RA
INH000027937
CMT, CFTe
The views expressed are for educational purposes only and do not constitute investment advice.
Tags: #MarketBreadth #NetAdvanceDecline #Nifty500 #Nifty50 #SectorBreadth #IndexBreadth #DailyBreadth