July 26, 2018
Technical analysis offers a wide range of options to analyze the strength of a market trend. Many use price action and indicators, but when it comes to analyzing the strength of an index, it is helpful to look at the breadth underlying that index. This will help analyze how the stocks within the index are performing. It is particularly valuable at a potential market top, since many of the smaller companies in an index may start struggling before the larger companies. However, since the larger companies hold more weight in the index, its price can still show an uptrend.