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market_indicators:percent_above_ma [2019/06/24 19:38] 127.0.0.1 external edit |
market_indicators:percent_above_ma [2023/09/29 15:02] jayanthi [Introduction: Internal Market Strength or Weakness] |
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| ====== Percent Above Moving Average ====== | ====== Percent Above Moving Average ====== | ||
| - | ===== Introduction ===== | + | ===== Percentage of Stocks Above a Moving Average: Internal Market Strength or Weakness ===== |
| - | The percentage of stocks trading above a specific moving average is a breadth indicator that measures internal strength or weakness in the underlying index. The 50-day moving average is used for short-to-medium-term timeframes, while the 150-day and 200-day moving averages are used for medium-to-long-term timeframes. Signals can be derived from overbought/oversold levels, crosses above/below 50% and bullish/bearish divergences. The indicator is available for the Dow, Nasdaq, Nasdaq 100, NYSE, S&P 100, S&P 500 and S&P/TSX Composite. SharpCharts users can plot the percentage of stocks above their 50-day moving average, 150-day moving average or 200-day [[:technical_indicators:moving_averages|moving average]]. A full symbol list is provided at the end of this article. | + | When an index continues to move higher, it would be helpful to understand if there's internal strength behind that movement. The percentage of stocks trading above a specific moving average is a market breadth indicator that can measure the internal strength or weakness in an underlying index. |
| - | ===== Calculation ===== | + | For short-to-medium-term timeframes, it's helpful to look at the percentage of stocks trading above the 50-day moving average. For medium-to-long-term-timeframes, it's best to look at the percentage of stocks trading above the 150-day and 200-day moving averages. You can get trading signals from crosses above/below 50%, overbought/oversold levels, and bullish/bearish divergences. The indicator is available for the Dow, Nasdaq, Nasdaq 100, NYSE, S&P 100, S&P 500, and S&P/TSX Composite. SharpCharts users can plot the percentage of stocks above their 50-day moving average, 150-day moving average or 200-day [[:technical_indicators:moving_averages|moving average]]. A full symbol list is provided at the end of this article. |
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| + | ===== Calculating Percentage Above MA ===== | ||
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| - | Nasdaq 100 example: 60/100 = .60 or 60% | + | Nasdaq 100 example: 60/100 = 0.60 or 60% |
| - | S&P 500 example: 80/500 = .16 or 16% | + | S&P 500 example: 80/500 = 0.16 or 16% |
| - | Dow Industrials example: 7/30 = .2333 or 23.33% | + | Dow Industrials example: 7/30 = 0.2333 or 23.33% |
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| - | The calculation is straightforward: simply divide the number of stocks above their XX-day moving average by the total number of stocks in the underlying index. The Nasdaq 100 example shows 60 stocks above their 50-day moving average and 100 stocks in the index. The percent above their 50-day moving average equals 60%. As the chart below shows, these indicators fluctuate between 0% to 100%, with 50% as the center line. | + | The calculation is straightforward: divide the number of stocks above their XX-day moving average by the total number of stocks in the underlying index. The Nasdaq 100 example shows 60 stocks trading above their 50-day moving average. Since there are 100 stocks in the index, the percent above their 50-day moving average equals 60%. The chart below shows that these indicators fluctuate between 0% to 100%, with 50% as the center line. |
| {{:market_indicators:percent_above_ma:pama-0-ndxexam.png|Percent Above SMA - Example}} | {{:market_indicators:percent_above_ma:pama-0-ndxexam.png|Percent Above SMA - Example}} | ||