NSE India - Market Breadth

Presenting Four different types of NSE India Market Breadth Indicators in one

1. Net New 52 week Highs and Lows
2. Percentage of stocks above Moving Averages 10, 20, 50, 200
3. 4% Advance Decline
4. Market Breadth Volume

Features
While adding the indicator, trader will be asked to choose what to be seen. If a trader wants all four to be seen then one can add four times and choose the Market Breadth


⦿ Single breadth indicator on the chart


⦿ Multiple breadth indicators on the chart


⦿ Supports dark mode

1. Net New 52 week Highs and Lows
   Displays the net number of stocks on NSE (India) making 52-week highs or lows. The count is displayed as a fraction of the total number of stocks in the NSE universe.
   
   Net New Highs (NNH) are calculated by taking the number of new 52-week highs on any given day and subtracting from it the number of new 52-week lows. A market is considered strong (bullish) when NNH are positive, or, in other words, when new highs exceed new lows.
   
   ⦿ Background highlight: We consider the bias as positive (bullish) when NNH stays positive for 3 consecutive days, & negative (bullish) when NNH stays negative for 3 consecutive days. Positive bias is highlighted with a green background. Negative bias is highlighted with a red background.
   
   ⦿ Moving Average: Another way to decrease whipsaws in analysing positive or negative NNH can be by smoothing them with a moving average. The script uses a 10-day SMA (user can modify this) of NNH. The bias is bullish when the smoothed NNH line is positive and bearish when negative.
   
2. Percentage of stocks above Moving Averages 10, 20, 50, 200
   Displays the percentage of NSE (India) stocks trading above key moving averages.
   
   Market breadth measures the degree of participation & the conviction in the overall mood of the underlying index. A positive market breadth is said to happen when more stocks are advancing than are declining. Among many ways to measure this, one simple way is the % of stocks trading above a certain moving average. When most of the stocks are trading above a specific moving average, the market breadth is termed strong.
   
   This script uses 10-day & 20-day EMA for short-term timeframes, & 50-day & 200-day EMA for medium to long-term timeframes.
   
   Default Mode
   
   We have a bullish bias when >50% of stocks are above their 50-day and 200-day MAs. We have a bearish bias when <50% of stocks are above their 50-day and 200-day MAs.
   
   We also look at short-term timeframes (10 & 20 MA) for overbought and oversold levels. Values above 80% are considered overbought and readings below 20% are deemed oversold.
   Individual Moving averages, & the table also, can be turned off.
   
   Oversold/overbrought market breadth does not necessarily indicate reversal, but rather an exhaustion. This can get resolved by either a price correction or a time correction. The breadth can remain in overbought zones for a long time while the price is in a strong uptrend — and equally so at oversold zones during a strong downtrend.
   
   Moving Average of Market Breadth
   
   Turning-on the MA of breadth displays the 50-day Moving Average of the % of stocks above the 50-day Moving Average.
   
   This is another way to visualise a smoothed version of the market breadth. If the % of stocks above the 50-day Moving Average is above its own 50-day Moving Average, then we can say that the breadth is strong.
   
   
3. 4% Advance Decline
   
   Market breadth provides insights into the participation of stocks in a market's movement.
   Various interpretations of market breadth exist, including gauging the quantity of new highs and new lows or evaluating up and down volume. Nevertheless, all breadth indicators fundamentally stem from the same basic concept, which can be expressed mathematically as the number of advancing & declining stocks.
   
   Thus, a count or ratio of advancing & declining stock objectively depicts the participation of stocks in an index or stock universe.
   
   A 4% advance or decline shows a significant range expansion.
   
   ⦿ The script calculates advances as a ratio of the daily percentage change ≥ 4% & the total number of stocks.
   ⦿ Declines are calculated as a ratio of the daily percentage change < -4% & the total number of stocks.
   ⦿ Net breadth is simply calculated by subtracting the declines from the advances. (4% up - 4% down). This depicts whether the day was bearish or bullish.
   
   Green area depicts the 4% advances.
   
   Red area depicts the 4% declines.
   
   
   
   
   There is an option to display only the net breadth.
   
   Interpretation
   
   A market where advances are more than declines is indicative of a healthy bull market. But extreme breadth can signal exhaustion, often leading to a reversal. This is true in case of advances as well as declines.
   If a market continues to rise while breadth does not increase, this is considered a divergence, which frequently leads to a reversal of the prevailing trend.
   
   
4. Market Breadth Volume
   Market Breadth Volume (MBV) is defined as the ratio between the count of stocks giving a volume 1.5 times greater than its 20-day SMA, and the count of stocks giving a volume 0.5 times lesser than its 20-day SMA. This breadth indicator reflects participation in the markets. A sloping upward MBV shows that money is coming into the market.
   MBV was devised by Chhirag_Kedia & this is how he explains it:
   
   
   • When it surpasses 1+ (benchmarking), it shows a matured upswing, which in the initial stages will result in strong buying but as the time passes with such a high rating will result in an extended market with high no. of breakout failures.
     
   • The final stage is ratings above 1.5 to 2+. These in later stages will reflect extreme reading and will result in trend exhaustion.
     
   • Similarly on the bearish side, the volume will dry up as we get a shakeout or a strong red day. This reduction in participation will result in lacklustre outcome in breakouts and will subsequently dry up further, usually coming under 0.2 to show extreme dryness.
     
   • Look for a systematic pick-up in volume post 15-20 days of first shakeout. Look for days with significant pick up with positive breadth, like volume coming around 0.20 etc. jumps to 0.35 to 0.45 etc. This will suggest that participation is picking up in the market and we will see a rally soon.
     
   FEATURES⦿ Multi-color Mode
   For the sake of visual representation, you can turn on the multi-color mode where the volume bars can have one of the 4 colors:
   Dry volume (Grey): Volume ≤ 0.25
   Low Volume (Orange): Volume between 0.25 & 0.5
   Mid Volume (Green): Volume between 0.5 & 1
   High Volume (blue): Volume > 1 → Mature upswing
   
   ⦿ Background Net Breadth
   Option to display the to display the net breadth as a background color. By default, only negative net breadth is tuned on.
   
   ⦿ Moving Average
   There is an option to turn on a moving average of the volume. By default, it is the 5 SMA. This shows the near-term trend, & whether the MBV is sloping upward or not.
   
   Dependency:
   • The script uses the Pine Seeds service to import custom data hosted in a GitHub repository and accesses it via TradingView as the frontend. So, the number of bars appearing on charts is fully dependent on the amount of historical data available. Any error or omission, if there, is a reflection of the hosted data, & not that of Tradingview. Pine seed repository is maintained by me and the daily incremental data is updated by the workflow in Github
     
   Limitations:
   • Such data has some limitations, like it can only be updated at EOD (End-of-Day), & only daily-based timeframes can be applied to such data. Irrespective of the intraday changes, only the last saved value on the chart is seen. So, it's best to use this script as EOD, rather than intraday.
     
   • At the time of publication of this script, data is available from 2004
     
   Credits:
   • This work is done in collaboration with my friend Finallynitin
   • NSE Market Breadth historical data is from Chhirag_Kedia
   • NNH concept & colors are based on CarusoInsights 's NNH script for US markets, & Fred6724's open-source version of that script.
     
   
   
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