Glossary
Market breadth
How many stocks are participating in a market move, measured with advancers versus decliners or the share above a moving average.
On this page
Market breadth measures how widely a move is shared across the stocks in a market or index. An index can rise because most of its members rise, or because a handful of the largest companies rise while the majority fall. Breadth separates the two. Analysts treat a broad advance as healthier and more durable than a narrow one, and they watch for breadth weakening before the index itself turns.
Common breadth measures
- Advancers versus decliners: the number of stocks up versus down on the day, often accumulated into an advance-decline line.
- Percentage above a moving average: the share of index members trading above their 50-day or 200-day average.
- New highs versus new lows: how many stocks are at 52-week highs compared with 52-week lows.
- Up volume versus down volume: trading volume in rising stocks against volume in falling ones.
How it is used
Breadth is mostly read for divergence. If an index makes a new high while the percentage of stocks above their 200-day average keeps falling, fewer companies are supporting the advance, which some traders see as a warning. Very washed-out breadth, such as fewer than 10% of stocks above their 50-day average, has also been read as a sign of capitulation near lows.
Breadth has limits. In a market led for years by a few mega-caps, a narrow market can persist for a long time without a reversal, and different breadth measures can disagree.