A sharp fall in the number of Nifty 50 stocks trading above their 200-day moving averages (DMAs) suggests that the market’s weakness runs deeper than the headline index indicates.

 On Wednesday, only 10 of the 50 stocks, or 20 per cent, were above the 200-DMA. Two days earlier, the count had fallen to six, its lowest level this year. In early January, 38 stocks, or 76 per cent, were above the threshold.

 The 200-DMA is a closely watched indicator of a stock’s long-term trend and can serve as an early warning of trouble.

Anish Teli, a portfolio manager at QED Capital Advisors, has tracked this for years and found that stocks often face further trouble after falling below this level. He cites Yes Bank, Rajesh Exports and HDFC Bank as examples.

 “All bad news comes below the 200-DMA. Price factors in all the bad news before the actual event happens. Less than half the stocks in the Nifty 500 are above the 200-DMA. This shows that the market is led by very few stocks. It is a classic stock-picker’s market. One needs to be very careful when this number falls,” he says.

 The 10 stocks still trading above their 200-DMAs include Eternal, Kotak Mahindra Bank, Trent, and Titan Company.

 When the Nifty 50 begins to fall, selling often spreads across its constituents before the index itself registers a steep decline.

Data compiled by the Business Standard Research Bureau for 2026 shows this pattern. The study tracked how many of the 50 Nifty stocks traded above their 200-DMAs over the past 10 months. A stock trading above this line is generally considered to be in a healthy long-term trend, while one below it is viewed as relatively weak.

 In three of the four market declines of 3 per cent or more this year, the number of stocks trading above their long-term averages fell by at least five within days of the index peak.