What are Broader Indices and What is Market Breadth?

Apr 05, 2010

Stocks Simplified Writes
by: Shaun

Broader Indexes are simply indexes that track more stocks. While some benchmark indexes may only track a few 10s or a few 100s of companies something like the SENSEX tracks the performance of many thousands of companies across India.

So if you heard, 'Sensex northbound; broader indices outperform' that means that indexes that track more stocks and are more diversified have been outperforming smaller indexes which hold less stocks and are less diversified.
It's pretty interesting I'll have to take a look at the SENSEX now to how it has been doing.

Anyways, the Market Breadth is a technical indicator that looks at stocks going up and stocks going down. It then uses this number to give a general idea of how strong the market is right now.

For instance, if 8,000 stocks went up in a given day vs 1,000 went down that would suggest that the bulls are in control and the market as a whole wants to go higher. So it is just another indicators investors can use to help predict the future movements in the market.

Hope that answers your questions.

What are Broader Indices and What is Market Breadth?

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What are Broader Indices and What is Market Breadth?