The Nepse index gained 14.35 points last week to close at 1151.38, supported by increasing MACD and RSI indicators and a decrease in market volatility. The index remains in a bullish state as shown by its position above the 50-day moving average. Near-term support is seen at 1130 with resistance at 1160, though the market is expected to continue its upward momentum.

1. TECHNICAL ANALYSIS
1. Market Summary (as of December 31, 2015)
NEPSE at close last week (December 31, 2015) 1151.38
NEPSE high last week (December 31, 2015) 1151.38
Weekly Change 14.35 points (or 1.26%)
Daily Volume (Avg.) NPR 45.97 crores
Total Traded Amount (weekly) NPR 183.89 crores
RSI 66.93
MACD Line 12.63
Signal Line 9.59
2. Nepse Figure
Nepse (June 1, 2014 – December 31, 2015)

2. 3. Trend Analysis
The benchmark index showed to be positive for most of last week. Nepse gained 14.35 points (or up 1.26%)
to close at 1151.38. The market corrected itself at the beginning of the week after going down by 5.08 points.
However, it landed in the green for the rest of the week. Insurance sub index made headlines last week, and
supported Nepse to move on a positive direction. Besides that, the agreement between government and
Madhesi parties to modify constitution with concession of Madhesi party created a positive momentum as
well. The 50-day moving average seems to be changing its directions and moving upwards, and candle sticks
following a bullish move up with the upper Bollinger band, indicating a bullish market ahead.
4. Resistance and Support
Immediate Support 1130
Support 2 1110
Immediate Resistance 1160
Resistance 2 1175
The Nepse index came close to its immediate support level of 1130 at the beginning of the week.
However, it bounced back up proving the support level to be strong. The immediate resistance level also
stands the same at 1160. The index will likely cross above the resistance level as the market is bullish at
the moment.
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, at the beginning of the week, stood at 11.18 and 7.42 level respectively. Both
the lines increased last week, where the signal line rose at a faster rate as compared to the rise experienced
by macd. This still shows that the market is positive. Towards the end of the week, the macd and signal
line ended at 12.63 and 9.59 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 climbed further up in the course of last week. It stood at 62 level at the beginning of the week. It
gained 4.93 points to end at 66.93 level at the end of the week. The RSI shows the market to be in a
buying pressure. Moving further up to 70’s level will signify overbought condition.
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 further up towards the upper Bollinger band, signifying a buying pressure in
the market. The distance between the upper and lower bands have decreased significantly in the course of
last week. This shows that the market is experiencing a decrease in 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.
Both the On-Balance Volume (OBV) and Nepse index continued to climb up last week, supporting the
bullish sentiment in the market. The average weekly volume transactions increased slightly to NPR 45.97
crores from NPR 44.82 crores the week prior. Although the market opened for four days last week, this
slight increase in volume supports the bullish momentum in the market.
7. Overview
The Nepse index gained a decent 14.35 points (or up 1.26%) to close at 1151.38. The 50-day moving average
is turning towards an upward direction, which shows the market to be positive. The macd and signal lines
continue to increase as well. The RSI is close to the 70’s level, which will show an overbought condition in
the market. The Bollinger bands have shown the market to decrease in volatility as the upper and lower bands
have closed in. The support and resistance level stands the same at 1130 and 1160 level respectively.

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