The Nepse index gained 2.43 points last week to close at 1718.15. The RSI and MACD indicators show a decrease in buying pressure in the market. The index continues to trade above its 50-day and 200-day moving averages, suggesting an overall positive market condition. Support and resistance levels remain unchanged at 1600 and 1800 respectively.

1. TECHNICAL ANALYSIS
1. Market Summary (as of July 14, 2016)
NEPSE at close last week (July 14, 2016) 1718.15
NEPSE high last week (July 3, 2016) 1722.53
Weekly Change 2.43 points (or 0.03%)
Daily Volume (Avg.) NPR 121.11 crores
Total Traded Amount (weekly) NPR 605.54 crores
RSI 69.83
MACD Line 36.65
Signal Line 43.49
2. Nepse Figure
Nepse (May 1, 2015 – July 14, 2016)

2. 3. Trend Analysis
The Nepse index gained 2.43 points (or up 0.03%) to close at 1718.15 last week. The market corrected itself
by 32.1 points. However, the market climbed up by 27.27 points on the last day of trading. The monetary
policy was released in the afternoon of Thursday last week, which could impact the market in the coming
days. Furthermore, rise in uncertain political movement could negatively affect the market. The
manufacturing and Others sectors remained as top gainers for majority ofthe week. The index continues climb
above the 50 days and 200 days moving average, indicating that the long term market outlook looks good.
4. Resistance and Support
Immediate Support 1600
Support 2 1483
Immediate Resistance 1800
Resistance 2
The Nepse index hovered around the late 1600 and early 1700 level last week. The index fell down to
1690.43 on Thursday. However, towards the end of the week, the index climbed back up towards the
1700 level. The current support and resistance level stands the same at 1600 and 1800 level 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 the signal line, at the beginning of last week, stood at 48.37 and 49.34 respectively. The
Macd and the signal line further declined in the course of the week, where the macd is moving below the
signal line. Towards the end of the week, the Macd and the signal line ended at 36.65 and 43.49
respectively. The Macd indicators show the market to be in a bearish mood.

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 last week stood at 79.81 points, indicating high buying pressure. However,
the RSI fell by 9.98 points in the course of the week to end at 69.83 level. RSI indicator shows a decrease
in 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 bounced back up from the middle bollinger band last week, suggesting the mid
band to be a strong support level. Currently the index is hovering close to the mid band, signifying a
slowdown in the over-bought condition in the market. The distance between the upper and lower bands
has converged, indicating a decrease in 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) appeared to move in a more volatile manner as compared to the
movement witnessed in the Nepse index. The average weekly volume transactions decreased to NPR
121.11 crores from NPR 150.77 crores the week prior. This decrease in the OBV, along with a decline in
Nepse, suggests that the current fall in Nepse is not a downtrend.
7. Overview
The Nepse index increased by 2.43 points (or up 0.03%) to close at 1718.15 last week. Nepse corrected itself
for three consecutive days, declining by 32.1 points. However, it bounced back up on Thursday by gaining
27.72 points. The index continues to run above the 50-day and 200-day moving averages, indicating that the
overall market condition looks good. The macd line is moving below the signal line, indicating a bearish
signal. The RSI also show a decline in the buying pressure in the market. The bollinger bands suggest a
decrease in market. The support and resistance level stands the same at 1600 and 1800 respectively.

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