NZ stock market still looks healthy
One indicator often used to gauge the market’s health is looking at the number of advancing stocks versus the number of declining ones. This indicator of market breadth measures the difference of how many stocks are going up on a daily basis compared to the number of stocks falling. In rising stock markets the indicator suggests that the uptrend is still in place.
If the market is still going up but more individual securities are falling rather than rising, this can by an early indicator that the trend may be turning. Looking at the S&P/NZX 50 Gross Index versus market breadth since the end of 2015, the advance-decline line has closely tracked the stock market higher. While it is but one indicator to be considered, one can see that the trend remains positive and the market rally is across most stocks. The inference being that the market is healthy and there is a continued uptrend in place.