Breadth Data

ProfileData's exclusive, proprietary Breadth Data is only available to users of Magic™ ANALYST and Magic™ CORPORATE.

Breadth data can be thought of as an additional set of market and sector indices that significantly improve your ability to predict price trends. Read on to understand why these specially calculated data streams are so sought after.

About Breadth Data

Share prices do not rise and fall in a vacuum – the mood of the market as a whole has a significant impact, especially in the shorter-term. In fact, it is often the case that for fairly long periods (up to a year or two in some cases), market sentiment and industry sentiment is a stronger predictor of the performance of a specific share than a company's financial performance.

Given this reality, many traders and investors believe that it is essential to assess the overall mood of the market (and major sectors) on an ongoing basis. If market movements will determine how shares move in the short term, you need to know where the market is going.

Broad-based indices (like the JSE All Share), widely used as market indicators, are nearly always skewed towards the performance of very large companies. To put this differently, the major indices often correlate poorly with the price action of medium-cap and small-cap stocks. Many investors regard market breadth indicators as a better measure of sentiment.

Breadth indicators are often the best gauge available of whether the market – or a certain sector – is in an uptrend, downtrend or sideways market. Breadth data is also used for identifying market tops and bottoms.

Calculation

Like indices, market breadth indicators are calculated from the data of many shares – usually all the shares in a sector or a particular market.

Breadth data is calculated by analysing for each trading day the number of advances, declines and unchanged securities. ProfileData's system performs these calculations for the overall market and for each of the major sectors. More refined indicators are created by further manipulation of this raw data.

Breadth Datastreams Available in Magic™

 

  • Absolute Breadth Index
  • Advance/Decline Line
  • Advance/Decline Ratio
  • Advancing Volume
  • Advancing—Declining Issues
  • Declining Volume
  • McClellan Oscillator