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Definition

The degree to which a move either up or down in the share market is broadly based including most of the shares in the market index. Market breadth is most often measured by analysing the number of shares that advanced or declined during the period or by counting the number of shares that went up and comparing it to the number that went down. Another way to measure it is to look at the percentage of shares that are beating the market average. If the market index is rising, but is being out-performed by only 20% of the shares in that index, then it shows that 80% are under-performing. In a situation like that we would say that the rise in the index is narrow and "lacks breadth". Generally, upward trends can only be sustained if they are broadly based and involve a majority of the shares in the index. For example, in May 2023 the upward rise in the S&P500 index of Wall Street was caused by only 20% of the shares included in the index - so the move lacked breadth.

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