Definition of Market breadth:
Certain breadth indicators also incorporate volume. They will not only look at whether a stock is advancing or declining in price, but also what the volume of those moves are. This is because price moves on larger volume are considered to be more significant than price moves on lower volume.
Market breadth indicators analyze the number of stocks advancing relative to those that are declining in a given index or on a stock exchange (such as the New York Stock Exchange or NASDAQ). Positive market breadth occurs when more stocks are advancing than are declining. This suggests that the bulls are in control of the market's momentum and helps confirm a price rise in the index. Conversely, a disproportional number of declining securities is used to confirm bearish momentum and a downside move in the stock index.
Number of buyers and sellers actually participating in the up and down price movement of a particular item or the entire market.
How to use Market breadth in a sentence?
- Market breadth indicators are useful but not infallible. They sometimes predict index reversals too early, and other times not at all.
- Market breadth studies attempt to uncover strength or weakness in the movements of an index that are not visible simply by looking at a chart of the index.
- There are multiple market breadth indicators based on the number of advancing and declining stocks, volume, number of stocks reaching certain hurdles, and other metrics.
- Market breadth indicators may forewarn of reversals. This occurs when the indicator diverges with the stock index.
Meaning of Market breadth & Market breadth Definition