Nepse Weekly Technical Analysis September 25 - September 29, 2016

1. TECHNICAL ANALYSIS
1. Market Summary (as of September 29, 2016)
NEPSE at close last week (September 29, 2016) 1753.38
NEPSE high last week (September 26, 2016) 1757.1
Weekly Change -13.53 points (or -0.73%)
Daily Volume (Avg.) NPR 89.11 crores
Total Traded Amount (weekly) NPR 445.56 crores
RSI 44.64
MACD Line -4.49
Signal Line 3.61
2. Nepse Figure
Nepse (May1, 2015 – September 29, 2016)

2. 3. Trend Analysis
The Nepse index declined by 13.53 points (or down -0.73%) to close at 1753.38 last week. The index fell by -
2.05% on Sunday. However, it bounced back up the very next day by 1.53%. Nepse continues to hover below
the 50-day moving average, indicating presence of short term bearish movement. Nonetheless, it is still
moving well above the 200-day moving average, signifying that long term market outlook looks good. The
average volume turnover last week decreased significantly to NPR 89.11 crores from NPR 141.43 crores the
week prior.
4. Resistance and Support
Immediate Support 1680
Support 2 1600
Immediate Resistance 1880
Resistance 2
The Nepse index hovered around mid 1700 in the course of last week. The current support and resistance
level stands the same at 1680 and 1880 respectively. The market seems to be in a selling pressure as
dashain festival approaches. However, long term bullish momentum continues to loom over the market,
which could lead Nepse to enter 1800 territory in coming weeks.
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 3.44 and 12.39 respectively. In the
course of the week, the macd line declined by 7.93 points, and the signal line by 8.78 points to close at -
4.49 and 3.61 points respectively. The macd line entering the negative territory, as well as moving below
the signal line, signifies a bearish run in the market.
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 38.14 points. In the course of the week, it gained 6.50
points to close at 44.64 level. If the RSI continues to give a neutral stance as it is moving in a horizontal
manner.
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 closer towards the lower bollinger band at the beginning of last week,
signifying selling pressure in the market. The gap between the upper and lower bands has further
converged, indicating a decrease in market volatility.

4. 6. Overview
The Nepse index fell by 13.53 points (or down -0.73%) to close at 1753.38 last week. Nepse is moving above
the 200-day, indicating long-term positive outlook of the market. However, it is currently hovering below the
50-day moving average, suggesting a presence of short term selling pressure in the market. The macd
indicator gives a bearish indication as macd line has entered the negative territory, and is moving below the
signal line. The RSI gives a neutral stance as it is hovering at 44.64 level. The gap between the upper and
lower bands has further converged, indicating a decrease in market volatility. The support and resistance level
stands the same at 1680 and 1880 respectively.

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