- The Nepse index gained 28 points last week to close at an all-time high of 1405 points, as the bullish sentiment in the market remains strong. - Technical indicators like the MACD and RSI show the market is in an overbought condition in the short-term, though the long-term trend remains positive. - New support and resistance levels have been established at 1390 and 1500 respectively.

1. TECHNICAL ANALYSIS
1. Market Summary (as of April 14, 2016)
NEPSE at close last week (April 14, 2016) 1405.78
NEPSE high last week (April 14, 2016) 1405.78
Weekly Change 28.36 points (or 2.05%)
Daily Volume (Avg.) NPR 57.20 crores
Total Traded Amount (weekly) NPR 228.81 crores
RSI 81.88
MACD Line 25.53
Signal Line 25.05
2. Nepse Figure
Nepse (June 1, 2014 – April 14, 2016)

2. 3. Trend Analysis
The Nepse index started the new-year 2073 by creating an all time height of 1405.78. The benchmark index
gained 28.36 points (or up 2.05%) in the course of last week. The development banks sector closed as the top
gaining sector last week. The 50 days moving average is still running above 200 days moving average,
indicating that the long term Nepse trend looks positive.
4. Resistance and Support
Immediate Support 1390
Support 2 1350
Immediate Resistance 1500
Resistance 2
The Nepse index crossed the immediate resistance level of 1390, as well as the psychological resistance
of 1400 level at the end of last week. This shows that the bullish sentiment is still strong in the market.
Currently, the new support and resistance level stands at 1390 and 1500 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.
Not much has changed in the Macd and the signal line as both the lines continue to move in a horizontal
direction. The macd and the signal line, at the beginning of the week, stood at 24.47 and 25.23
respectively. The lines continue to move close to each other; where the signal line is just below the macd
line. As compared to the upward movement in the Nepse, the macd line continues to show a negative
divergence. Towards the end of the week, the macd and the signal line closed at 25.53 and 25.05
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 76.42 points. In the course of the week, it gained 5.46
points to close at 81.88 level. Although the RSI shows over-bought condition, it has remained above the
70’s level for a long time period, which signifies a strong bullish presence 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 has moved back up towards the upper Bollinger band, indicating high buying
pressure in the market. As evident from the graph above, all of the bands are moving in an upward
direction showing a bullish momentum. The distance between the upper and lower band remain constant,
indicating 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) continues to move along with the direction of the Nepse index. In the
course of last week, the OBV climbed up along with the climb witnessed by Nepse. This increase in the
OBV supports the bullish momentum in the market. The average weekly volume transactions increased to
NPR 57.20 crores from NPR 52.36 crores the week prior.
7. Overview
The Nepse index ended in the green throughout last week. It gained 28.36 points (or up 2.05%) to close at
1405.78, creating a new height. The index created history by breaking the 1400 mark. The 50-day and 200-
day moving average continue to climb up along with the benchmark index, indicating that the overall market
condition looks good. The macd and the signal line continue to move together in a horizontal direction,
showing negative divergence relative to the movement in the Nepse index. The RSI ended at 81.88 level,
indicating high buying pressure in the market. The Bollinger bands also show buying pressure in the market
as the index is close to the upper band. The new support and resistance level stands at 1390 and 1500
respectively.

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