What is the market width?

The

market width refers to the theory that states that the strength of the stock market depends on the movement of all stocks on the market. It flies in the face of the theory that the whole market is driven by several main shares. If the market width signals are strong, it tends to mean that the market is pointing up, while poor signals indicate a decline. Some of the tools available to investors who believe in this theory are volume statistics, statistics comparing the number of shares growing with the amount of decreasing and comparison of shares reaching annual maximum and shares of annual minimal day.

While some investors like to close their attention on individual stocks, others will not move on stocks until they get the market as a whole. These investors want to know whether the market is the bull market, which means it is positive and is driven by optimistic investors or whether it is a bear market that Jaans is trendy negative and investors are trying to get out of their old positions ratherthan to new ones. Market width is an attempt to determine market momentum by looking at the whole market.

The advantage of market width indicators is that they could be able to distinguish when other market indicators can be out of target. Several large stocks could be collected at a certain time, and the size of these inventories could significantly distort certain market diameters. If the vast majority of the remaining market stocks are decreasing at the same time, it is likely that these large stocks could distort the overall picture.

How much inventory grows and decreases and the volume of stocks sold is two great market width indicators. Using a preliminary board line that measures the difference between stocks on the rise and supplies that are Falling on a certain day and mapping the difference after a certain period of time can help to see growing and decreasing trends. In conjunction, the total volume of shares bought, unlike the amount of stocks purchased, can indicate the reliability of these trends.

There are many other statistics available for market analysis and one of the most important is the comparison of 52 weeks of maximum or minimum. This happens when the stocks either reach their highest point in the last year or to a low point in the same time period. Comparison of the amount of maximum with a minimum can show whether there is a severe increase or a heavy drop occurs.