Nepse Weekly Technical Analysis August 14 - August 18, 2016

1. TECHNICALANALYSIS
1. Market Summary (as of August18, 2016)
NEPSE at close last week (August18, 2016) 1735.06
NEPSE high last week (August18, 2016) 1735.06
Weekly Change -39.81points (or-2.20%)
Daily Volume (Avg.) NPR 109.98crores
Total Traded Amount (weekly) NPR 439.90crores
RSI 47.53
MACD Line -1.42
Signal Line 13.90
2. Nepse Figure
Nepse (May1, 2015 – August18, 2016)

2. 3. Trend Analysis
The Nepseindexlost 39.81 points (ordown2.20%) to close at 1735.06 last week. The indexdeclined by 80.06
points at the beginning of the week. However, the market recovered some of the points as it gained 40.25
points towards the end of the week. The index is moving well above the 200 day moving average, indicating
the long term outlook looks good. However, it is moving just above the 50 day moving average, showing that
the 50 day MA to be a strong support level.
4. Resistance and Support
Immediate Support 1690
Support 2 1723
Immediate Resistance 1800
Resistance 2
The Nepse indexbroke the support level of 1723 by reaching 1694.81last week. However, it has climbed
back up and above the 1723 level. The index experienced high volatility in the past week. Hence, the new
support and resistance level now stands at 1690 and 1800 level respectively.
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 Macdand the signal line, at the beginning of last week, stood at 10.92 and 26.71respectively. Both the
linesdeclined and diverged in the course of the week, where the macd line continues to move below the
signal line. Such indicator gives a bearish signal of the market. Furthermore, the macd line entered the
negative territory as well. At the end of the week, the macd and the signal line stood at -1.42 and 13.90
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 46.06 points. In the course of the week, it gained 1.47
points to close at 47.53 level. The RSI indicator continues to show a decrease in the buying pressure in
the market.
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 moved closer towards the lower bollinger band. However, it bounced back up
closer to the middle band towards the end of the week. The bollinger bands also signify a rise in selling
pressure in the market. The distance between the upper and lower bands also indicates presence of high
volatility in the market.
6. Overview
TheNepse index lost 39.81 points (or down2.20%) to close at 1735.06last week.Nepsecontinues to run above
the 50-day and 200-day moving averages, indicating that the long term market condition looks good. The 50-
day moving average also shows to be a strong support level, as the index bounced back up twice. The macd
line has entered the negative territory, giving a bearish signal of the market. The RSI also shows a decrease in
the buying pressure in the market. The bollinger bands continue to show high volatility as well. The new
support and resistance level now stands at 1690 and 1800 respectively.

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