Nifty is trading above 50-day, 200-day Moving average. Some interesting numbers showing overall market trend. Let’s see numbers of Nifty 500 and Nifty Mid-Small 400 indices to see overall picture:
Medium-term trend: Number of stocks trading above 50-day ave: Nifty 50: 88% Nifty 500: 90% Mid-Small 400: 92% Historically, this is a reversal zone for Nifty 50. Nifty 500 and Mid-small 400 universe is at historical high.
Long-term trend: Number of stocks trading above 200-day ave: Nifty 50: 66% Nifty 500: 90% Mid-Small 400: 70% For Nifty 500 and Mid-Small 400, this happened last time in Jan 2018
Momentum: Stocks trading above RSI 70. This shows stocks in strong momentum: Nifty 50: 12% Nifty 500: 26% Mid-Small 400: 30% Nifty 500 and 400 number are at historical high.
Volatility: Stocks trading above 3% 14-day ATR for Nifty 50 and 5% for 500 and 400: Nifty 50: 20% Nifty 500: 18% Mid-Small 400: 20% Volatility is falling in all indices. Trend is stronger than volatility.
Noiseless chart breadth indicators are steady and bullish. Nifty 500 & Nifty 400 average to Nifty 50 ratio is around March 2019 high. But I see a strong consolidation pattern here - bullish.
Meaning, Trend > volatility & there is a broad participation. Currently, Nifty is outperforming Gold, Currency, Bonds. Strong participation by Mid & Smallcaps. The ratio is at historical high but bullish. At this participation, portfolios are doing good. Breakouts are working.
Breakouts in midcaps will keep working as long as this picture is intact. Short-term reversal or consolidation is possible. If volatility increases, then there is a possibility of correction in these numbers – go slow in breakout if that happens. Overall trend is bullish.
Video explaining this. https://t.co/eDh8nXA0Xz There are more interesting aspects of this kind of analysis. Will share.
youtu.be/JTz7opjTV-Y
