What does breadth measure in market analysis?

Breadth measures the advance and decline data of stocks, providing insight into the overall market sentiment and health. It reflects the number of stocks that are participating in a market move, whether it is upward or downward. When more stocks are advancing compared to those that are declining, it indicates strong market participation and confidence among investors. Conversely, if more stocks are declining than advancing, it suggests weakness and a lack of broad support for the current market direction.

By analyzing breadth, market technicians can assess whether a market rally is being led by a substantial number of stocks or if it is narrowly focused on only a few, which may indicate vulnerability. This metrics help investors understand the strength of market movements and can signal potential reversals or continuations in trends.