NSE Breadth Shifts to Improving: What's Next?

The Indian equity market, as measured by AltraOne's proprietary metrics, is showing a notable shift in underlying momentum. The Altra Market score, which gauges overall market breadth and texture by analyzing the percentage of stocks above key moving averages, has moved to 57.5. This score, ranging from 0 to 100, indicates the market's overall strength, with higher numbers pointing to more bullish momentum across a wider array of stocks. This latest reading places NSE in an 'Improving' regime, signaling a positive change from previous cautious readings and suggesting a broadening participation of stocks in upward trends.

Market Breadth Details

A closer look at the market's technical texture reveals key details about this improving breadth. Currently, 58.0% of NSE stocks are trading above their 20-day Exponential Moving Average (EMA), a common short-term trend indicator for traders. Similarly, 52.0% are above their 50-day EMA, and 52.0% are above their 200-day EMA. The alignment of stocks above these key moving averages (EMA) is a crucial signal for momentum traders, indicating a healthier underlying trend. The market also registered 42 advances against only 8 declines, further supporting the narrative of expanding strength. While the 15-day Altra Market score trend shows a slight decline of -0.8, the overall shift to 'Improving' suggests a recent inflection point rather than sustained weakness.

Sectoral Momentum and Leadership

This market shift isn't uniform, and the Altra Sector score provides insight into where the strongest trends reside. This score not only measures momentum within a sector but also ranks it against others in the same market, helping identify relative strength. The current landscape shows a strong tilt towards bullishness, with 9 out of 11 sectors exhibiting bullish momentum, 0 remaining neutral, and only 2 appearing bearish. This broad participation across sectors reinforces the 'Improving' market breadth.

Leading the pack is Nifty Pharma, holding its #1 rank from last week with a 'Confirmed leader' regime that is accelerating. Close behind is Nifty Auto at #2, also accelerating and moving up one spot. Nifty Metal has made a significant leap, climbing four spots to #5 and also showing accelerating momentum as a 'Confirmed leader'. Nifty FMCG, while still lagging, is noteworthy for beginning to turn up, climbing five spots to #6.

However, not all sectors are participating equally. Nifty IT, despite being #3, is described as 'Lagging' with momentum weakening further. Similarly, sectors like Bank Nifty (#4), Nifty Realty (#9), Nifty Infra (#10), and Nifty Fin Service (#11), while still 'Confirmed leaders', are showing signs of cooling off, indicated by their recent drops in rank. This divergence highlights the importance of selectivity even within an improving market, favoring sectors and stocks that align with accelerating momentum, as indicated by their individual Altra Score – a 0-100 score derived from EMA alignment and RSI trend across daily, weekly, and monthly timeframes, where higher scores signify more bullish momentum.

What is the Altra Market score? The Altra Market score measures overall market breadth — the proportion of stocks in an index trading above key moving averages. A score above 60 signals broad market participation and a healthy momentum environment. Below 40 signals broad weakness. It is updated daily after market close.

Track these scores daily on AltraOne — momentum analytics for NSE, S&P 500, and TSX, updated every trading day after market close.

Altra Score is a momentum indicator reflecting EMA alignment and RSI trend across daily, weekly, and monthly timeframes. It is not investment advice. Past momentum does not guarantee future performance. Please consult a SEBI-registered advisor before making investment decisions.