Technical analysis of Nepal Stock Exchange (Nepse) index for the week from Jan 04, 2015 to Jan 08, 2015. The technical analysis includes summary, RSI, MACD and Bollinger band analysis. The analysis is done by Kriti Capital & Investments Ltd.

1. Technical Analysis
1. Market Summary (as of Jan 09, 2015)
Nepse at close last week (Jan 08, 2015) 930.97
Nepse high last week (Jan 08, 2015) 930.97
Weekly Change 27.29 (or 3.02%)
Daily Volume (Avg.) NPR 28.48 crores
Total Traded Amount (weekly) NPR 1.42 billion
Immediate Resistance 938.41
Immediate Support 875.56
RSI 66.71
MACD Line 11.48
Signal Line 7.87
2. Market Trend
Nepse (Jan 01, 2014 – Jan 08, 2015)
Continuing with the upward trend from the previous week, Nepse managed to close higher once
again this week. With investors hoping for consensus among political parties, the index increased
during 4 of the 5 trading days making it a great start for 2015. As a result, Nepse made a remarkable
increase of 27.29 points (or 3.02%) to close at 930.97 points. The average daily volume in the market
also increased from NPR 26.87 crores the week prior to NPR 28.48 crores this week. Over the last few
weeks, the market volume has been gradually increasing suggesting rising investor participation.
Currently, Nepse is slightly below its nearest resistance point of 938.41 points. If it moves past this
level with adequate volume, the market may move further ahead. However, the 50-day moving

2. average is still below the 200-day moving average, which is normally indicative of a bearish scenario
in the market.
3. 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. With the recent rise in Nepse, the RSI indicator
has also followed the market in the upward direction. There has been greater demand for stocks in
recent times, which is pushing the market near overbought level. This week, the RSI increased to
66.71 levels from 57.46 levels the week before.
RSI (Jan 02, 2014 – Jan 08, 2015)
4. 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. Since the MACD line
crossed above the Signal line on December 04, 2014, it indicated a buy signal and the momentum has
been on an upward direction. Consequently, the MACD line also crossed above the zero line on
December 16, 2014 suggesting further possibility of an uptrend.
MACD (Jan 02, 2014 – Jan 08, 2015)
5. 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. On December 23, 2014, the Nepse line
touched the mid-band (which acted as a support level) after which the index kept moving higher. The

3. steep rise in Nepse over the past two weeks suggests that the market is slightly overbought. Market
volatility has also been on the higher side in recent times.
Bollinger Bands (Jan 02, 2014 – Jan 08, 2015)
Overview:
The last two trading weeks has been a boon for the stock market as it has once again rallied by 27.29
points (or 3.02%) to close at 930.97 points. The market has been able to sustain itself as investors are
hoping for political consensus. Currently, Nepse is slightly below its nearest resistance point of 938.41
points while the nearest support level is at 875.56 points. The volume situation in the market has
been gradually improving as investors traded a total of NPR 1.42 billion this week. In the last two
weeks, the rise in Nepse has pushed the RSI to 66.71 levels – moving it closer to the overbought zone.
The MACD line is currently trending above the signal line suggesting a near term bullish momentum
in the market in recent times. The Bollinger Bands currently indicate a slightly overbought scenario in
the market. Overall, the secondary market has been in a bullish phase in the near term, however,
certain indicators point to slightly overbought scenario. Also, the 50-day moving average maintaining
below the 200-day moving average indicates that the long term trend has not been able to pick up in
the positive direction.

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Nepse (Jan 01, 2014 – Jan 08, 2015)

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RSI (Jan 01, 2013 – Jan 08, 2015)
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MACD (Jan 01, 2014 – Jan08, 2015)
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6. Bollinger Bands (Jan 01, 2014 – Jan 08, 2015)
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