How to Use NSE Market Breadth & Volume to Spot Trends (Kenya, 2026)

How to Use NSE Market Breadth & Volume to Spot Trends (Kenya, 2026)

How to Use NSE Market Breadth & Volume to Spot Trends (Kenya, 2026 Guide)

TL;DR – Quick Summary
Relying on NASI alone is risky. Market breadth (advancing vs declining shares) and trading volume (actual money behind moves) reveal the true trend. This guide shows how Kenyan investors can interpret these signals using 2025–2026 NSE data, micro-stories, and sector insights.

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Why NASI Alone Can Be Misleading

Many Kenyans ask: “NASI is up, but why are most shares flat or falling?” From what I’ve observed, NASI’s market-cap weighting means large companies like Safaricom, Equity Bank, and KCB dominate the index. For example, on 18 Jan 2026, NASI rose 0.8% while 36 of 66 shares declined. This shows that the market rally was narrow, not broad — a critical signal for trend-spotting.

For beginners, see Ordinary Shares Explained Simply in Kenya to understand index behavior.

Market Breadth: Counting the Real Movers

Market breadth shows the number of shares rising, falling, or unchanged. Spotting trends means comparing NASI moves with breadth:

  • Rising NASI + high advancing shares + increasing volume: Strong, sustainable trend.
  • Rising NASI + low advancing shares + low volume: Narrow rally, high-risk trend.
  • Falling NASI + high advancing shares: Possible sector rotation, hidden opportunities.
DateAdvancing SharesDeclining SharesUnchanged
18 Jan 2026183612
16 Jan 2026172615
14 Jan 2026223014

Observing breadth over several days highlights whether a NASI rally is broad or narrow. Narrow breadth signals caution — the trend may not sustain.

Trading Volume: Money Behind the Moves

Volume confirms the strength of price movements. On 18 Jan 2026, total turnover was ~KES 3.8 billion, concentrated in Safaricom and Equity Bank. Many mid-cap stocks had low volume, showing that the NASI gain was driven by a few heavyweights rather than broad market participation.

Sector Analysis: Where the Real Trends Are

Sector concentration affects trend strength:

  • Telecoms: Safaricom accounted for ~45% of daily NSE value.
  • Banking: Equity Bank & KCB ~30% of turnover.
  • Manufacturing & Energy: Low activity, few advancing counters.

Trends are stronger when multiple sectors participate. Narrow sector dominance signals a risky trend — essential for spotting real opportunities.

Micro-Story: Kenyan Investor Experience

Mary, a Nairobi teacher, invested KES 50,000/month in 10 mid-cap stocks. NASI rose 2% in January 2026, yet her portfolio fell 1.2%. She learned that **tracking NASI alone hides real performance**. Observing breadth and volume would have revealed the weak trend early.

Historical Context: NASI vs Breadth Trends (2024–2026)

Past patterns show NASI can rise while advancing shares remain low — typical post-election years, when blue-chip speculation is high. Experts use this to anticipate corrections and identify undervalued mid-caps.

Practical Guide: Spotting Trends Step by Step

  1. Track NASI vs advancing/declining shares daily.
  2. Record turnover per sector — rising NASI + low volume in most sectors = weak trend.
  3. Check consecutive days of increasing breadth and volume — this indicates a strong trend.
  4. Watch sudden volume spikes without index movement — could indicate sector rotation or insider activity.

See also: Shares Are “Long Term” — But How Long Is Long Term?

Cluster Content: Related Kenyan Investing Guides

Common Mistakes Kenyan Investors Make

  • Chasing NASI without checking breadth or volume
  • Ignoring sector trends
  • Overweighting large caps
  • Failing to observe patterns over multiple days

FAQ – NSE Market Breadth & Volume

Can NASI rise when most shares fall?
Yes — NASI is weighted by market cap, not by the number of advancing shares.

Is market breadth an official NSE metric?
No, it’s derived from trading data but widely used by analysts.

Does low volume always signal weakness?
Not always, but low volume often shows lower market participation behind NASI moves.

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About the Author

Postine Ngeli — Kenyan finance educator at MoneyMarketHubKenya, helping real investors make informed decisions in the Kenyan market.

Disclaimer

Educational purposes only. Not financial advice. Always do your research before investing.

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