- The Nepse index gained 112.5 points last week to close at a record high of 1200.92. - Trading volume and amount were higher than the previous week, signaling continued bullish momentum in the market. - Most technical indicators like MACD, RSI, and Bollinger Bands show the market is in an overbought state with high volatility, but continuing an upward trend.

1. TECHNICALANALYSIS
1. Market Summary (as of August 20, 2015)
NEPSE at close last week (August 20, 2015) 1200.92
NEPSE high last week (August 20, 2015) 1200.92
Weekly Change 112.5 points (or 9.98%)
Daily Volume (Avg.) NPR 80.33 crores
Total Traded Amount (weekly) NPR 401.66 crores
RSI 90.09
MACD Line 52.61
Signal Line 40.27
2. Nepse Figure
Nepse (June 1, 2014 – August 20, 2015)

2. 3. Trend Analysis
Last week, Nepse enjoyed continuous gains as the benchmark index closed in the green throughout the week.
Its volume transaction remains higher than average and supports the buying pressure in the market. The index
gained a staggering 112.5 points (or up 9.98%) last week to close at a record 1200.92. Nepse also surpassed
its immediate resistance, as well as resistance 2, during the beginning of last week. Towards the end of the
week, the index surpassed its all time high level of 1175.55. Furthermore, the index is moving above the 50-
day and 200-day moving average at a higher rate, signifying a bullish momentum in the market.
4. Resistance and Support
Immediate Support 1130
Support 2 1100
Immediate Resistance 1250
Resistance 2
Nepse surpassed immediate resistance as well as resistance 2 during the beginning of last week. Towards the
end of the week (19th
August), the Nepse index created history by breaking its all time high index of 1175.55.
The lowest Nepse went down to last week was at 1112.05. Currently, the revised support and resistance level
stands at 1130 and 1250 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 Signal lines continued their increase throughout last week. The macd line is moving well
above the signal line, and the distance between them has increased as well, triggering a bullish outlook.
By the end of the week, the macd and signal lines ended at 52.61 and 40.27 respectively.
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. Last week, the RSI hovered above the 80 level zone, which is considered highly ov erbought condition in
the market. This high buying pressure in the market is due to the rise in bullish momentum resulting from
the recent monetary policy announcement. The RSI at the beginning of last week was at 82.85 level.
Towards the end of the week, RSI increased by 7.24 points to end at 90.09 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 is still hovering between the upper and middle Bollinger bands. As you can see from the
graph above, the Nepse index and all of the bands are moving in a steep upward direction, and the gap
between the upper and lower band is wide, signifying high market volatility.
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.

4. In the current context, the On-Balance Volume (OBV) supports the rise in the Nepse index. As you can see
form the graph above, the benchmark index followed a steep upward direction, and the OBV moved up at a
similar rate as well. The average weekly volume transactions increased to NPR 80.33 crores from NPR 63.55
crores the week prior.
7. Overview
The Nepse index gained a staggering 112.5 points (or up 9.98%) last week to close at 1200.92. The 50-day
moving average (MA) is moving upward at a steep rate and also moving above the 200-day MA, triggering a
bullish attitude in the market. The average weekly volume transactions increased to NPR 80.33 crores from
NPR 63.55 crores the week prior. The RSI ended at 90.09 level, indicating a strong buying pressure in the
market. The Bollinger bands still show prevalence of high market volatility as the distance between the upper
and lower bands continue to widen. The Macd indicator gave positive divergence with Nepse index as both
the index and Macd line made higher high. Finally, as mentioned in the previous paragraphs, Nepse has
created a new record high of 1200.92 so far. Its new support and resistance level now stands at 1130 and 1250
respectively.

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