Analysing market breadth can provide insights into the overall health and direction of a financial market or specific market index. There are several ways that the study of market breadth can be useful. Indicator of Market Strength: Market breadth measures the number of individual stocks or securities participating in a market move. A strong market rally accompanied by a broad participation (many stocks advancing) indicates widespread confidence and strength in the market. Conversely, if only a few stocks are driving …

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Share traders use various indicators to gauge the sentiment in the market. They use these tools to determine whether the general stock market is feeling optimistic or pessimistic. In this article we discuss what market breadth means and how to determine its strength. Definition Market breadth can show the strength of the market by looking at how many stocks are increasing in price against how many stocks are decreasing in price. If there are more stocks with increasing stock prices …

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