Market Breadth Analysis Fundamentals
Essential guide to understanding market breadth indicators, participation metrics, and how to use them for market timing and trend analysis.
Market breadth measures the participation of stocks in market moves. Strong breadth confirms sustainable trends, while deteriorating breadth often precedes market reversals.
Key Insights
Point 1
Advance-decline line as primary breadth indicator
Point 2
Percentage of stocks above moving averages
Point 3
New highs vs new lows analysis
Point 4
Volume-based breadth indicators
Point 5
Sector participation and rotation patterns
Practical Applications
Monitor A/D line divergences from price action
Use %Above 50MA for trend strength assessment
Track new highs expansion in uptrends
Watch for breadth thrust signals (>90% stocks up)
Combine multiple breadth metrics for confirmation
Related Market Indicators
Financial Glossary
Market Capitalization
Total value of company's outstanding shares
Fundamental AnalysisPrice to Earnings Ratio
Valuation metric comparing price to earnings
Fundamental AnalysisDividend Yield
Annual dividend as percentage of stock price
Income InvestingBeta Coefficient
Measure of stock volatility relative to market
Risk ManagementBull Market
Sustained period of rising stock prices
Market Cycles