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← Markets Guide Open Breadth Tab ↗

Published: April 20, 2026 | 5 min read | Platform Guide | Markets

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Breadth explained — why a 1% Nifty gain can mask a deteriorating market, and what the grid tells you instantly

What You Will Master

The Market Breadth tab cuts through the headline Nifty number to reveal the underlying health of the market. An index can rise 1% while 70% of its stocks are actually falling — this is called a narrow market, driven by a handful of heavyweights. Breadth tells you whether the rally (or selloff) is broad-based and participatory, or narrow and concentrated.

What This Guide Covers:

What SMA breadth means — % of stocks trading above their moving average
Reading the 4×4 grid — 4 indices, 4 SMA periods, green/amber/red colour coding
The SMA 200 column — the single most important cell to check
SMA 20 vs SMA 200 divergence — bounce vs trend, pullback vs breakdown
5 breadth scenarios — what each pattern means for stock picking
Combining breadth with FII/DII and the Heatmap — the full top-down picture

What does "% above SMA 200" mean for an index?

It means: what fraction of that index's constituent stocks are currently trading at a price higher than their 200-day Simple Moving Average. For example, if 38 of Nifty 50's 50 stocks are above their 200-day MA, the reading is 76% — shown as a green cell. This is the single best indicator of long-term market health.

What do the three colours (green, amber, red) mean?

Green (≥70%) = broad strength — the majority of that index's stocks are above that SMA, indicating healthy participation. Amber (40–70%) = mixed — not enough stocks are above the SMA for confidence; the market is in transition. Red (<40%) = broad weakness — most stocks are below that SMA, indicating distribution or a downtrend even if the index itself is flat or modestly positive due to heavyweight bias.

Why is the SMA 200 column more important than SMA 20?

SMA 200 reflects 10 months of price history — it's a long-term trend filter. A stock above its 200MA is in an established uptrend; below it is in a downtrend. SMA 20 reflects only 4 weeks and can oscillate frequently with short-term volatility. If SMA 200 breadth is green, you have a confirmed broad uptrend. If it's red, even a short-term rally (green SMA 20) may be a counter-trend bounce.

What does it mean when SMA 20 breadth is green but SMA 200 breadth is red?

It means there's a short-term bounce inside a long-term downtrend. Most stocks have rallied recently but remain below their long-term moving averages. This is a common pattern in bear market rallies — they feel strong but lack structural support. It's a caution signal: do not mistake the bounce for a recovery unless SMA 200 breadth also improves.

What does it mean when SMA 200 breadth is green but SMA 20 breadth is red?

This is a healthy pullback in an uptrend. Most stocks are still in long-term uptrends (SMA 200 green) but have dipped below their short-term moving averages in the recent sell-off (SMA 20 red). This pattern often represents a buying opportunity — the long-term structure is intact, and the short-term weakness may be a temporary correction. Watch for SMA 20 breadth recovering to confirm.

Why does Market Breadth matter even if Nifty is up today?

Large-cap indices like Nifty 50 are market-cap weighted — a handful of the largest companies (Reliance, HDFC Bank, Infosys, TCS) have outsized influence. On a day when these 5 stocks are up 2% but 40 of the other 45 Nifty stocks are flat or down, the index reports a positive day. SMA breadth over time reveals whether the underlying stocks are trending — not just the headline number.

What is the advance/decline label shown in the Markets Overview?

The Overview tab shows a simplified breadth label computed from today's advance/decline count (how many stocks in Nifty 500 are up vs down today). The labels are: BROAD-BASED RALLY (>75% advancing), POSITIVE BIAS (55–75%), MIXED (45–55%), NEGATIVE BIAS (25–45%), BROAD SELLING (<25%). This is a daily snapshot; the Breadth tab's SMA grid is a multi-week structural view.

Why does the Breadth tab take ~30 seconds to load the first time?

On first load, the API computes % above each SMA across all constituents of four indices — roughly 200+ stocks × 4 SMA calculations each. This is a non-trivial computation. After the first load, data is cached for up to 4 hours and subsequent views are near-instant. The data refreshes every 4 hours during trading hours.

1. What Market Breadth Measures

Market breadth is the study of how many stocks are participating in a market move. A headline index gain of 0.8% can be driven by two or three heavyweight stocks while the majority of the index's components are actually declining. This is a narrow market — and narrow markets are fragile. True bull markets have broad participation: most stocks are trending up, not just the index.

Finmagine's breadth metric answers one simple question for each index: what % of this index's stocks are trading above their [SMA period] moving average? The higher the percentage, the healthier the market.

Why moving averages, not daily advance/decline:

Daily advance/decline counts (stocks up vs down today) are noisy — they change every session with the mood. SMA breadth is structural: a stock either is or isn't in an uptrend. The SMA 200 in particular smooths out all short-term noise and tells you the true trend picture across the index. This is why professional technicians use it as their primary breadth filter.

The Four Indices

Finmagine's breadth grid covers four indices that together give a complete picture of market health:

Nifty 50 — India's 50 largest companies by market cap. Dominated by Financials (HDFC Bank, ICICI Bank, Kotak), IT (Infosys, TCS), and Energy (Reliance). Breadth here tells you whether large-caps are broadly healthy.
Bank Nifty — 12 most liquid banking stocks. Since banks are 30%+ of Nifty 50 by weight, bank breadth often leads or lags the broader market. Weak bank breadth often precedes broad market weakness.
Nifty IT — 10 IT sector companies. IT moves on USD/INR, US tech earnings, and global risk appetite. Its breadth often decouples from the broader Nifty — useful for sector-specific decisions.
Nifty Midcap Select — 25 midcap stocks. Midcaps are more retail-sentiment-driven than large-caps. In bull markets, midcap breadth tends to exceed large-cap breadth. In corrections, midcap breadth deteriorates first and fastest.

2. Reading the 4 × 4 Grid

The grid has four rows (indices) and four columns (SMA 20, 50, 100, 200). Each cell shows a percentage and a fraction — the percentage is colour-coded, and the fraction shows the raw count (e.g. "32 / 50" means 32 of 50 Nifty stocks are above that SMA).

≥ 70% Broad strength

40–70% Mixed

< 40% Broad weakness

Index

SMA 20

SMA 50

SMA 100

SMA 200

Nifty 50 (50 stocks)

76%38 / 50

72%36 / 50

62%31 / 50

70%35 / 50

Bank Nifty (12 stocks)

58%7 / 12

50%6 / 12

33%4 / 12

50%6 / 12

Nifty IT (10 stocks)

80%8 / 10

70%7 / 10

80%8 / 10

Midcap Select (25 stocks)

36%9 / 25

32%8 / 25

28%7 / 25

24%6 / 25

Illustrative data · refreshes every 4 hours

In this example:

Nifty 50 looks broadly healthy — most cells green, SMA 200 at 70%.
Bank Nifty is mixed — the SMA 100 cell is red (33%), indicating medium-term deterioration in banking stocks even as the short-term looks moderate.
Nifty IT is uniformly green — strong broad participation across all time frames.
Midcap Select is entirely red — midcaps are in a broad downtrend across all SMAs. This is a warning: even if large-caps are holding, the broader market is weak.

Read the grid diagonally: A healthy market typically shows green across the top-right (SMA 20, 50) and green in SMA 200. If the SMA 200 column is all red across all four indices while SMA 20/50 look amber or green, you are likely in a bear market bounce — not a new bull run.

3. The SMA 200 Column — The Most Important Signal

If you have time to check only one column, check SMA 200. This is the single best proxy for long-term market health and the column that professional technicians watch most closely.

What SMA 200 Breadth Thresholds Mean

SMA 200 Breadth	Colour	What It Means	How to Approach Stock Picking
> 70%	Green	Broad long-term uptrend. Most stocks have been trending up for months.	Favour long ideas. Odds are with the trend. Use Screener to find quality stocks in Stage 2 breakouts.
40–70%	Amber	Transitional. Market in middle ground — some stocks trending, others not.	Be selective. Focus on sector leaders (use the Heatmap). Avoid adding significant new positions in weak sectors.
< 40%	Red	Broad long-term downtrend. Most stocks below 200MA — distribution phase.	Reduce new position sizing. Focus on capital preservation. Only buy stocks with exceptional fundamentals showing relative strength.

The most dangerous market: High SMA 20 (green) + Red SMA 200. This is the classic bear market rally setup — stocks have bounced off a low, SMA 20 looks good, but the long-term damage is not repaired. Many investors get trapped buying these rallies. Always check whether SMA 200 breadth confirms the short-term picture.

4. Key Breadth Scenarios and What They Mean

✅ Scenario 1: Broad Uptrend — All Green

SMA 20, 50, 100, 200 all green across all indices. The market is in a confirmed broad bull phase. This is the best environment for stock picking — the rising tide is lifting most boats. Focus on momentum and quality breakouts.

✅ Scenario 2: Healthy Pullback

SMA 200 green, SMA 20 red. Short-term correction in a healthy long-term uptrend. Often the best buying opportunity — stocks have dipped but their trend is intact. Watch for SMA 20 recovering as the signal to re-enter.

⚠️ Scenario 3: Narrow Market

Nifty 50 SMA 200 green, but Midcap Select all red. The index is being held up by large-caps while mid/small caps deteriorate. Historically precedes broader corrections. Avoid midcaps; stick to large-cap quality only.

⚠️ Scenario 4: Bear Market Rally

SMA 20 green, SMA 200 red. Most stocks have bounced recently but remain below long-term averages. Counter-trend rallies can be sharp but rarely last. Stay cautious; wait for SMA 200 breadth to recover to amber before deploying capital.

🔴 Scenario 5: Broad Downtrend — All Red

All indices, all SMA periods in red. Every major index segment is in a broad downtrend. This is the most challenging environment for stock picking. Capital preservation, reducing position sizes, and waiting for early breadth recovery signals (SMA 20 turning green in Nifty 50 first) is the correct approach.

5. Combining Breadth with the Rest of Markets

Breadth is most powerful as part of the complete top-down picture. Here is how each Markets tab adds context:

FII/DII tab — Are institutions driving or resisting the breadth reading? Broad green breadth + FII buying is high-conviction bullish. Green breadth + FII selling means DIIs are holding things up — watch carefully for whether the counter-balance holds.
Sector Heatmap — Which specific sectors are contributing to the breadth health? Broad green breadth across all four indices but red heatmap in Metals + Pharma tells you those sectors are dragging. The Heatmap shows the sector-level composition of the breadth signal.
Technicals tab — The Market Breadth tab shows % above SMAs; the Technicals tab shows individual breakout scans (52W highs, Stage 2, RSI extremes). Use Breadth for the macro view, Technicals for stock-level signals that are consistent with that macro view.
Trending Sectors tab — Confirms which sectors are the current market leaders. High breadth + strong trending sectors = high-quality setup for buying sector leaders via the Screener.

The complete pre-trade checklist using Markets tabs:
1. Breadth SMA 200 — is the overall environment constructive?
2. FII/DII (last 5–10 sessions) — is big money buying or selling?
3. Heatmap — which sectors are green across 1Y/3Y/5Y?
4. Trending Sectors — which sector is the current momentum leader?
5. Screen for stocks in that sector → Stock analysis page
Only when all 5 check out does a new position have maximum odds.

Check the current breadth reading for the Indian market:

Open Markets → Breadth Tab ↗

← FII / DII Guide All Markets Guides

📊 Markets — Market Breadth Tab

% Stocks Above SMA 20 · 50 · 100 · 200 — Nifty 50, Bank Nifty, IT, Midcap