NEPSE Technical Analysis (December 4 - December 8, 2016)

1. TECHNICAL ANALYSIS
1. Market Summary (as of December 8, 2016)
NEPSE at close last week (December 8, 2016) 1544.68
NEPSE high last week (December 4, 2016) 1570.95
Weekly Change -55.81 points (or -3.51%)
Daily Volume (Avg.) NPR 65.73 crores
Total Traded Amount (weekly) NPR 328.66 crores
RSI 36.78
MACD Line -45.28
Signal Line -48.86
2. Nepse Figure
Nepse (May 1, 2015 – December 8, 2016)

2. 3. Trend Analysis
The Nepse index took a downfall by 55.81 points (or down 3.51%) to close at 1544.68 last week. The index
gained 9.91 points on Tuesday. However, it ended in the red for the rest of last week. Investors still seem to
be nervous about the market as it continues to be volatile. The index remains below the 200 day moving
average, signifying presence of bearish sentiment. The average volume turnover decreased significantly to
NPR 65.73 from NPR 116.48 the week prior.
4. Resistance and Support
Immediate Support 1465
Support 2 1405
Immediate Resistance 1671
Resistance 2 1722
The Nepse index continues to hover between the current support and resistance level of 1465 and 1671
respectively. The index could further hover in the same direction in days to come as the market continues
to give no clear indication.
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 -50.10 and -51.52 respectively. In the
course of the week, both macd and signal line increased by 4.82 and 2.66 points to close at -45.28 and -
48.86 respectively. The macd line has crossed above the signal line, which indicates a bullish trigger.
However, both the lines continue to remain in the negative territory.
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 39.92 points, which shows that the market was moving
away from selling pressure. In the course of the week, it lost 2.34 points to end at 36.78 level. The RSI
currently gives a neutral stance.
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 continues to hover between the middle and lower bollinger bands, which could
possibly show some presence of selling pressure in the market. The market remains highly volatile as the
distance between the upper and lower bands remain wide.

4. 6. Overview
The Nepse index lost 55.81 points (or down 3.51%) to close at 1544.68 last week. The index could move
sideways in days to come as nervousness and uncertainty looms over the market. The macd indicator has
crossed above the signal line, indicating a possible bullish trigger. However, both the lines continue to remain
in the negative territory. The RSI gives a neutral stance, closing at 36.78 level. The bollinger bands continue
to show presence of high market volatility. The support and resistance level stands the same at 1465 and 1671
respectively.

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