The Nepse index gained 0.61% over the past week to close at 1774.87 points. Technical indicators show the market is currently in a bullish state as the index remains above its 50-day and 200-day moving averages. However, the MACD line is below the signal line, suggesting a bearish signal in the short term. The RSI and Bollinger bands indicate buying pressure is decreasing and volatility is moderate. Near-term support and resistance levels are seen at 1723 and 1900 points respectively. Overall, the market outlook remains positive despite short term technical signals of weakness.

1. TECHNICAL ANALYSIS
1. Market Summary (as of August 11, 2016)
NEPSE at close last week (August 11, 2016) 1774.87
NEPSE high last week (August 10, 2016) 1779.57
Weekly Change 6.27 points (or 0.61%)
Daily Volume (Avg.) NPR 121.13 crores
Total Traded Amount (weekly) NPR 605.62 crores
RSI 51.99
MACD Line 15.77
Signal Line 30.65
2. Nepse Figure
Nepse (May 1, 2015 – August 11, 2016)

2. 3. Trend Analysis
The Nepse index gained by 6.27 points (or up 0.61%) to end at 1774.87 last week. The index experienced
high volatility as investors seem to lose and gain confidence in short time-period. The index hit a circuit break
after it went down 5.03% on Monday. However, it gained back 5.04% the next day, hitting a circuit break
again. The index is still moving above the 50 day and 200 day moving average, suggesting that the overall
market outlook looks good. Furthermore, the 50-day moving average also acted as support level to the index.
4. Resistance and Support
Immediate Support 1723
Support 2 1600
Immediate Resistance 1900
Resistance 2
The Nepse index broke the support level of 1723 by reaching 1675.91 on Monday of last week. However,
it gained back all the points the next day to close at 1760.42. The current support and resistance level
stands the same at 1723 and 1900. It seems that the market has regained its confidence in the market, and
this could push the market further up in the 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 35.72 and 48.60 respectively. Both
the lines continued to decline in the course of the week, where the macd line is still moving below the
signal, indicating a bearish signal of the market. By the end of the week, the macd and the signal line
stood at 15.77 and 30.65 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. The RSI, at the beginning of last week, stood at 49.66 points. In the course of the week, it gained 2.33
points to close at 51.99 level. The RSI indicator shows a slight increase in the buying pressure 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 fell and moved closer to the lower bollinger band, signifying an increase in selling
pressure in the market. However, towards the end of the week, the index bounced back up and hovered
around the middle band, which show that the market could move side-ways. The distance between the
upper and lower bands seem to close in, which could signify a possible decrease in market volatility.
6. Overview
The Nepse index gained 6.27 points (or up 0.61%) to close at 1774.87 last week. Nepse continues to run
above the 50-day and 200-day moving averages, indicating that the long term market condition looks good.
The technical indicators continue to show bearish signals in the market. However, the indicators also show
possible rise in bullish sentiment in the coming weeks. The macd line is moving below the signal line,
showing bearish signal of the market. The RSI as well as the bollinger band, shows that the market has moved
out of the buying pressure. The bollinger bands also show moderate presence of market volatility. The new
support and resistance level stands at 1723 and 1900 respectively.

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