June 2, 2017

NSE TRIN (Arms Index) Chart

The TRIN is a breadth indicator developed by Richard W. Arms in 1967. The index is calculated by dividing the Advance-Decline Ratio by the Advance-Decline Volume Ratio.

In general, strong market advances are accompanied by relatively low TRIN readings because up-volume overwhelms down-volume to produce a relative high AD Volume Ratio. This is why the TRIN appears to move “inverse” to the market. A strong up day in the market usually pushes the Arms Index lower, while a strong down day often pushes the Arms Index higher.

Here is the TRIN chart for NSE ... note the indicator is smoothed with a 10 day SMA.

Looking at above chart, the TRIN indicator hints at topping out of the market.

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