Nepse Weekly Technical Analysis November 29 - December 3, 2015

1. TECHNICAL ANALYSIS
1. Market Summary (as of December 3, 2015)
NEPSE at close last week (December 3, 2015) 1072.94
NEPSE high last week (November 23, 2015) 1072.94
Weekly Change 28.93 points (or 2.81%)
Daily Volume (Avg.) NPR 29.25 crores
Total Traded Amount (weekly) NPR 146.26 crores
RSI 46.21
MACD Line -17.52
Signal Line -18.73
2. Nepse Figure
Nepse (June 1, 2014 – December 3, 2015)

2. 3. Trend Analysis
The benchmark index witnessed high volatility last week. The index has been reacting to the ongoing political
news and announcements. Nepse gained 26.01 points (or up 2.54%) to close at 1070.02. The index is still
moving between the 50-day and 200-day moving average (MA). The 200-day MA also acted as a strong
support to the index last week. NEPSE took a reversal from 1022.77 after fall of 183 point from 1205.
Considering the current down trend, it would be safe to enter after crossover of 1091 level as trend line
indicate resistance level at 1091 point. Positive aspect of political conversation had lead market to such huge
reversal. It is expected to crossover immediate and strong resistance level if political talk turns positive.
Looking at the long term trend line, market fell below the support zone, indicating that the market would fall
further. But considering political aspect has greater impact in Nepalese capital market, positive talk between
political parties may spur a bullish trend.
4. Resistance and Support
Immediate Support 1022
Support 2 1000
Immediate Resistance 1091
Resistance 2 1109
On current position of the market, immediate support level stands at 1022, from where market took
reversal last Monday and support level 2 stands at 1000, where “00” level work on psychological aspect.
On the other hand, immediate resistance level is at 1091, previously used to work as strong support level
now turned as resistance and second resistance stand at 1109.
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 signal line, at the beginning of the week, stood at -21.89 and -17.10 respectively. Both the
line are still negative, which shows that the bearish sentiment is still present in the market. However, By
the end of the week, the macd line crossed above the signal line, indicating that the market could be
bullish again. Towards the end of the week, the macd and signal lines ended at -17.52 and -18.73
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 the week stood at 23.70 level, which showed a highly oversupplied market.
However, in the course of the week, RSI gained a staggering 22.51 points to close at 46.21. Currently,
RSI shows a neutral stance as it is hovering close to 50’s level.
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 above the lower band and towards the mid band in the course of last week.
The bands indicate that supply has cooled down as compared to the week prior. The upper and lower
bands also show signs of increase in market volatility as the bands have diverged slightly.
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

4. 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) shows a constant movement as compared to the fall witnessed by Nepse
the week prior. This shows that large investors are still optimistic about the market. The average weekly
volume transactions increased slightly to NPR 29.25 crores from NPR 24.87 crores the week prior.
7. Overview
The Nepse index gained 28.93 points (or up 2.81%) to close at 1072.94. The index is currently moving
between the 50-day and 200 day moving averages. The 200-day MA is giving a strong support to the
benchmark index. The macd shows a bullish signal as the macd line has crossed above the signal line. The
RSI indicates that the market has come out of the oversupply zone. Nonetheless, the market still remains
volatile due to unstable political situation. The Bollinger bands shows sign of increase in market volatility as
the upper and lower bands have starting to widen. The current support level stands at 1022, whereas the
resistance level stands at 1091.

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line are still negative, which shows that the bearish sentiment is still present in the market. However, By
the end of the week, the macd line crossed above the signal line, indicating that the market could be

7. bullish again. Towards the
end of the week, the macd and signal lines ended at -17.52 and -18.73 respectively.
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