Nepse Weekly Technical Analysis 21 August - 25 August, 2016

1. TECHNICALANALYSIS
1. Market Summary (as of August 25, 2016)
NEPSE at close last week (August 25, 2016) 1730.62
NEPSE high last week (August 25, 2016) 1730.62
Weekly Change -4.44 points (or -0.19%)
Daily Volume (Avg.) NPR 86.37 crores
Total Traded Amount (weekly) NPR 345.50 crores
RSI 48.67
MACD Line -11.15
Signal Line 0.06
2. Nepse Figure
Nepse (May1, 2015 – August 25, 2016)

2. 3. Trend Analysis
The Nepse index lost 4.44 points (or down -0.19%) to close at 1730.62 last week. The index declined by 53.2
points for most of the week. However, the market recovered 48.76 points on the last trading day, signifying
presence of bullish sentiment in the market. The index is hovering around 50 day moving average, which
shows that there is nervousness present in the market. However, Nepse continues to move well above the 200
day moving average, indicating the long term market outlook looks good.
4. Resistance and Support
Immediate Support 1680
Support 2 1600
Immediate Resistance 1800
Resistance 2
The Nepse index broke the support level of 1723 again and remained below it for most of the week.
However, the index climbed back up and above 1723 by the end of the week. The current support and
resistance level stands at 1680 and 1800 respectively. The index continued to experience high volatility
the past week as well.
5. Trend Indicator
a.) MACD
The MACD is a momentum oscillator formed by using two different types of moving averages, which
provides specific buying or selling signals. When a MACD line crosses above the signal line, it is
considered to be a positive sign and indicates a time to buy, and vice-versa.
The Macd and the signal line, at the beginning of last week, stood at -3.62 and 10.40 respectively. Both
the lines continued to decline and diverged in the course of the week, where the macd line continues to
move below the signal line. The macd indicator still shows presence of bearish sentiment in the market.
Towards the end of the week, the macd and the signal line ended at -11.15 and 0.06 respectively.
b.) RSI
RSI is a form of leading indicator that is believed to be most effective during periods of sideways
movement. Such indicators may create numerous buy and sell signals that are useful when the market is
not clearly trending upwards or downwards.

3. The RSI, at the beginning of last week, stood at 45.80 points. In the course of the week, it gained 2.87
points to close at 47.53 level. The RSI remaining in the 40’s zone show that the market has come out of
the over-bought zone, and could move sideways.
c.) Bollinger Bands
The Bollinger Band is a technical indicator that consists of a moving average (21-day) along with two
trading bands above (upper band) and below it (lower band). The bands are an indication of volatility,
which are represented by calculating standard deviation.
The benchmark index is hovering between the lower and middle bollinger band, which shows that the
market has moved out of over-bought condition. The market volatility remains high as the distance
between the upper and lower bands remain wide.

4. 6. Overview
The Nepse index lost 4.44 points (or down 0.19%) to close at 1730.62 last week. Nepse is hovering around
the 50 day moving average, which shows short term nervousness in the market. However, the index is moving
well above the 200 day moving average, indicating the long term market outlook looks good. The macd
indicator still show bearish sign as the macd line is in the negative territory, and moving below the signal line.
The RSI is hovering in the 40’s zone, indicating that the market has come out of the buying pressure. The
bollinger bands continue to show high volatility as well. The new support and resistance level now stands at
1680 and 1800 respectively.

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