1. The Nepse index fell 5.95% last week to close at 1768.6, falling for six consecutive days due to decreased investor confidence following a government change. However, the index remains above its 50-day and 200-day moving averages, suggesting an overall positive market outlook. 2. Technical indicators are now showing bearish signals, with the MACD line moving below the signal line and RSI declining to 50.48, indicating reduced buying pressure. Bollinger bands show the market moving out of overbought territory and increased volatility. 3. Immediate support and resistance levels for the index stand at 1723 and 1900 respectively, with the index currently above support. This suggests the market

1. TECHNICAL ANALYSIS
1. Market Summary (as of August 4, 2016)
NEPSE at close last week (August 4, 2016) 1768.6
NEPSE high last week (July 31, 2016) 1862.76
Weekly Change -109.33 points (or -5.95%)
Daily Volume (Avg.) NPR 156.10 crores
Total Traded Amount (weekly) NPR 780.51 crores
RSI 50.48
MACD Line 42.68
Signal Line 51.82
2. Nepse Figure
Nepse (May 1, 2015 – August 4, 2016)

2. 3. Trend Analysis
The Nepse index fell by 109.33 points (or down 5.95%) to end at 1768.6 last week. The index ended in the
red for six consecutive days, showing a fall in investor confidence. The index is still moving above the 50 day
and 200 day moving average, suggesting that the overall market outlook looks good.
4. Resistance and Support
Immediate Support 1723
Support 2 1600
Immediate Resistance 1900
Resistance 2
The Nepse index took a dive after reaching an all time high of 1881.45. The current support and
resistance level stands at same at 1723 and 1900 respectively. The index is still above the immediate
support level, which could mean that the market should bounce back up in the coming week.
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 61.35 and 53.89 respectively.
However, in the course of the week, both the lines took a downturn, where the macd line is moving below
the signal line. Such indicators give a bearish signal of the market.
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 77.40 points, which indicated high buying pressure in the
market. However, in the course of the week, the RSI declined 26.92 points to end at 50.48 level. Such a
fall in RSI also shows loss of investor confidence in the market, as well as a decrease in the buying
pressure.
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 away from the upper bollinger band and towards the middle band,
indicating a decrease in over-bought condition in the market. The distance between the upper and lower
bands continues to increase, signifying an increase in market volatility.
6. Overview
The Nepse index lost 109.33 points (or down 5.95%) to close at 1768.6 last week. The index fell for six
consecutive days, giving a bearish signal. However, 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 are
starting to show bearish signals in the market. The macd line is moving down and below the signal line. The
RSI as well as the bollinger band, shows that the market has moved out of the buying pressure. The bollinger
bands also show presence of market volatility. The new support and resistance level stands at 1723 and 1900
respectively.

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