- The Nepse index gained 12.38 points (1.20%) last week to close at 1040.36. The average weekly trading volume was NPR 49.64 crores. - Technical indicators like MACD and RSI suggest the market is still in a bullish trend, though volatility has increased as seen in the widening Bollinger bands. - Immediate support and resistance levels for the index are now at 1020 and 1052 respectively. The index is expected to surpass resistance levels driven by continued buying pressure from new investors.

1. TECHNICALANALYSIS
1. Market Summary (as of August 6, 2015)
NEPSE at close last week (August 6, 2015) 1040.36
NEPSE high last week (August 6, 2015) 1040.36
Weekly Change 12.38 points (or 1.20%)
Daily Volume (Avg.) NPR 49.64 crores
Total Traded Amount (weekly) NPR 248.18 crores
RSI 72.16
MACD Line 26.13
Signal Line 23.59
2. Nepse Figure
Nepse (Jan 01, 2014 – August 6, 2015)

2. 3. Trend Analysis
After taking some corrections, Nepse’s upward trend picked up again on Sunday of last week. The volume
transaction also supported the gain in last week. The average volume last week was 49.64 crores. With a fairly
high volume transaction, Nepse sustained its pace and ended in the green. This shows that investors are
optimistic of the bull market. The benchmark index trailed a rather side-way movement majority of last week.
The 50-day MA is moving well above the 200-day MA, and by the end of the week, the market closed above
all short term and long term MA, indicating a bullish trend of the market.
4. Resistance and Support
Immediate Support 1020
Support 2 1000
Immediate Resistance 1052
Resistance 2 1070
For past few weeks, Nepse has been making higher low, creating new support to the market trend. After
considering some revisions, Nepse’s new immediate support level now stands at 1020 and its support 2 stands
at 1000. Reflecting on current trend, it seems that Nepse could surpass its current resistance level of 1052,
considering the buying pressure at the market. Furthermore, positive political and economic news will likely
cause the benchmark index to beat resistance 2 of 1070.
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.
Both the Macd line made minuscule change throughout last week, whereas the signal line kept increasing.
The distance between the lines has closed in as well. However, the macd line is still above the signal line,
showing that the market is still bullish. By the end of the week, the macd and signal lines ended at 26.09
and 22.96 respectively.
b.) RSI

3. 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 again hovered around the 70-level throughout last week. It still shows a strong over-bought
condition in the market. At the beginning of last week, the RSI stood at 71.81. Not much change was seen
as the RSI fell by a modest 0.24 points to end at 70.57 by the end of last week.
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 closed between the upper and mid Bollinger band throughout last week. The mid
Bollinger band is still acting as a strong support level. The gap between the upper and lower band is still
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. Last week, the On-Balance Volume (OBV) showed high volatility in the market. This high volatility could
still be related towards high buying pressure in the market. By the end of the week, both the OBV and the
index increased again. The average weekly volume transactions fell to NPR 49.64 crores from NPR 61.28
crores the week prior. However, there has been a steady increase in volume transaction over the past few
weeks. This shows that new investors are entering the market, causing high buying pressure as a result of the
monetary policy announcement.
7. Overview
The Nepse index made a modest gain of 12.38 points (or up 1.20%) last week to close at 1040.36. The 50-day
moving average (MA) is moving above the 200-day MA, indicating a bullish attitude in the market. The
average weekly volume transactions fell to NPR 49.64 crores from NPR 61.28 crores the week prior.
However, there has been a steady increase in volume transaction over the past few weeks as new investors
seem to be entering the market due to the monetary policy announcement. The RSI is still hovering around
the 70-level, indicating an over-bought condition. The Bollinger bands show prevalence of high market

5. volatility as the distance between the upper and lower bands have widened. The new immediate support and
resistance level now stands at 1020 and 1052 respectively.
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