Synopsis
In the past, stocks have typically maintained levels above these extended-term trend markers during strong bull markets. However, during downturns like the present one, they often dip below the 200-DMA, signaling significant underlying fragility in the market. The 200-DMA reflects a stock’s performance trend over approximately one year, equivalent to around 200 trading days.
In Mumbai, despite a month-long downturn in Indian equities spurred by unprecedented foreign institutional selling, the fundamental resilience of most major stocks remains unscathed.
Out of the 1,392 stocks valued at more than ₹1,000 crore, 856 stocks, accounting for 62%, are currently surpassing their 200-day moving average (DMA), a significant indicator of long-term trends. Trading above this level is generally interpreted as a positive signal in the market. Conversely, stocks or indices trading below their 200-DMA are often seen as…
