- The Nepse index gained 48.58 points last week to close at 1566.7, above the 50-day and 200-day moving averages, indicating an overall positive market condition. - Technical indicators like MACD and RSI show the market is in a bullish momentum phase, while Bollinger bands signal moderate volatility. - Immediate support and resistance levels for the index remain at 1463 and 1600 respectively. The market outlook is positive if MACD line crosses above the signal line in coming weeks.

1. TECHNICAL ANALYSIS
1. Market Summary (as of June 9, 2016)
NEPSE at close last week (June 9, 2016) 1566.7
NEPSE high last week (June 9, 2016) 1566.7
Weekly Change 48.58 points (or 3.22%)
Daily Volume (Avg.) NPR 137.57 crores
Total Traded Amount (weekly) NPR 687.87 crores
RSI 69.47
MACD Line 22.17
Signal Line 22.24
2. Nepse Figure
Nepse (Jan 1, 2015 – June 9, 2016)

2. 3. Trend Analysis
The Nepse index gained 48.58 points (or up 3.22%) last week to close at 1566.7. The benchmark index went
through a correction mode the week prior. The index lost 34.98 points on Sunday of last week. However, it
climbed up for the rest of the week. Nepse 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. The insurance sector pushed up
the index as investors seem bullish on the sector.
4. Resistance and Support
Immediate Support 1463
Support 2 1390
Immediate Resistance 1600
Resistance 2
The Nepse index reached an all time height of 1566.7 last week. After going through its correction mode,
the index continued its bullish run. As mentioned in the previous article, the long term outlook of the
index looks good, and Nepse could break its resistance level of 1600 in the coming weeks. Currently the
immediate support and resistance level stands the same at 1463 and 1600 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 Macd and the signal line, at the beginning of last week, stood at 19.75 and 25.20 respectively. The
Macd line moving below the signal line signifies a bearish outlook. However, towards the end of the
week, the macd and the signal line ended at 22.17 and 22.24 respectively. The macd indicator shows that
the market is still in a bullish momentum.

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 47.37 points. The RSI reaching the 40’s zone indicate a
selling pressure in the market. However, towards the end of the week, the RSI gained 22.10 points to end
at 69.47 level. This indicates that the market is experiencing buying pressure again, as investors continue
to have a strong bullish sentiment.
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 reached below the mid bollinger band, signifying a decrease in buying pressure in
the market. However, in the course of the week, the index climbed up towards the upper band indicating
an increase in over-bought condition in the market. The distance between the upper and lower band has
remained constant, signifying moderate 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), as well as the Nepse index, climbed up for most of last week, indicating
a bullish momentum. The average weekly volume transactions increased to NPR 137.57 from NPR
119.52 crores the week prior. At the end of last week, the volume transaction stood at 189.94 crores,
which is the highest in history.
7. Overview
The Nepse index ended in the green for most of last week. It gained 48.58 points (or up 3.22%) to close at
1566.7. 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 could cross above the signal line, which would indicate a bullish
outlook of the market. The RSI ended at 69.47 level, which show an increase in the buying pressure in the
market. The Bollinger bands show constant market volatility as the distance between the upper and lower
bands remain constant. The support and resistance level stands the same at 1463 and 1600 respectively.

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