What Percent of Nifty 500 Stocks Are Above Their 200 DMA?

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A Useful Market Indicator

One important data point to monitor in the stock market is the percentage of stocks trading above their 200-day moving average. For the Nifty 500 index, which includes 500 stocks, this percentage provides significant insights into the overall health of the market. A chart sourced from DSP Netra illustrates how this percentage changes over time and how it can be used to identify market trends.

Source : DSP Netra

When Markets Experience Significant Declines

During major market corrections, only about 10% of Nifty 500 stocks tend to remain above their 200-day moving average. This indicates that nearly 450 stocks are trading below this crucial level, reflecting severe weakness in the market. When this occurs, it often signals that the market is close to reaching its bottom, a pattern observed multiple times in the past.

When Markets Are Strong

Conversely, during robust bull runs, up to 90–95% of stocks typically rise above their 200-day moving average. This is an indication that the market is becoming overheated and operating at full strength. When such a high percentage of stocks exceed this important benchmark, it often points to an overbought situation, suggesting that profit-taking may be imminent.

Current Market Trends

Recently, the percentage of stocks above the 200-day moving average dropped to a low of around 10–15%, a historical indicator of potential market recovery. Currently, this number is on the rise again, suggesting that the market may have found its bottom and is beginning to bounce back.

How to Track This Data

You can track this data through your own charting software by adding an indicator that shows the percentage of Nifty 500 stocks above their 200-day moving average. Alternatively, you can follow our weekly ‘Good Bad Ugly’ report every Saturday, where this statistic is also shared. Monitoring this data can help you understand when the market transitions from being oversold to normal, or from normal to overbought.

Do you use this indicator to track market trends? How do you identify market bottoms and tops? Share your thoughts in the comments below! If you found this blog helpful, don’t forget to SHARE it with your friends!

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