Nepse Weekly Technical Analysis June 19 - June 23, 2016

1. TECHNICAL ANALYSIS
1. Market Summary (as of June 23, 2016)
NEPSE at close last week (June 23, 2016) 1666.29
NEPSE high last week (June 23, 2016) 1666.29
Weekly Change 33.35 points (or 2.04%)
Daily Volume (Avg.) NPR 156.75 crores
Total Traded Amount (weekly) NPR 783.75 crores
RSI 78.59
MACD Line 41.75
Signal Line 36.51
2. Nepse Figure
Nepse (May 1, 2015 – June 23, 2016)

2. 3. Trend Analysis
The Nepse index gained a decent 33.35 points (or up 2.04%) to close at 1663.29 last week. The index
corrected itself on Sunday and Monday of last week by losing 17.84 points. However, it climbed back up for
the rest of the week to reach an all time height. High turnover continues to support the bullish trend in Nepse.
The index continues to run above the 50 days moving average, as well as the 200 days moving average,
indicating that the long term trend looks positive.
4. Resistance and Support
Immediate Support 1483
Support 2 1463
Immediate Resistance 1700
Resistance 2
The Nepse index reached an all time height of 1666.29 last week. The technical indicators continue to
show presence of bullish momentum in the market. The immediate support and resistance level remains
the same at 1463 and 1700 respectively. It seems that the current bullish presence could drive the market
to break the resistance of 1700 in the coming week.
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 38.60 and 31.69 respectively. The
macd indicator indicates bullish momentum as the macd line is moving above the signal line. Towards the
end of the week, the macd and the signal line ended at 41.75 and 36.51 respectively.

3. 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.
The RSI at the beginning of last week stood at 74.14 points. The RSI hovered above the 70’s zone
throughout the week, signifying an over-bought condition in the market. At the end of the week, it closed
at 78.59 level. The RSI indicator also indicates a strong bullish trigger 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 is hovering close to the upper bollinger band, indicating high buying pressure in the
market. The upper and lower bands continue to diverge, showing an increase in market volatility.

4. 6. Volume Indicator (On-Balance Volume)
On-Balance Volume (OBV) is a momentum indicator that relates volume to the current price of the index
or security. It measures buying and selling pressure at the market. It acts as a cumulative indicator that
adds volume on up days and subtracts volume on down days. If a price increase is supported by OBV, it
confirms an uptrend, whereas if a price decrease is supported by OBV, it confirms a downtrend.
The On-Balance Volume (OBV) followed the Nepse index movement, as both of them declined at the
beginning of last week. However, the OBV and the Nepse index climbed back up for the remaining of the
week. The average weekly volume transactions declined to NPR 156.75 crores from NPR 186.68 crores
the week prior. The turnover volume also supports the bullish rise in Nepse.
7. Overview
The Nepse index gained 33.35 points (or up 2.04%) to close at 1666.29 last week. Nepse corrected itself at the
beginning of the week by losing 17.84 points. The index is still running above the 50-day and 200-day
moving averages, indicating that the overall market condition looks good. The macd line is moving above the
signal line, indicating a bullish presence. The RSI ended at 78.59 level, signifying buying presence in the
market. The Bollinger bands have diverged, signifying an increase in market volatility. The new support and
resistance level stands at 1483 and 1700 respectively.

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