- The Nepse index reached a new all-time high of 1326.53 last week, gaining 8.5 points or 0.65%. - Most technical indicators continue to signal the market is in a bullish trend, including the RSI remaining above 70 and the 50-day and 200-day moving averages rising along with the index. - The new immediate support and resistance levels for the index are 1318 and 1350, respectively, after it broke through the previous resistance of 1320.

1. TECHNICAL ANALYSIS
1. Market Summary (as of March 17, 2016)
NEPSE at close last week (March 17, 2016) 1326.53
NEPSE high last week (March 17, 2016) 1326.53
Weekly Change 8.5 points (or 0.65%)
Daily Volume (Avg.) NPR 80.83 crores
Total Traded Amount (weekly) NPR 4041.56 crores
RSI 82.11
MACD Line 22.23
Signal Line 22.52
2. Nepse Figure
Nepse (June 1, 2014 – March 17, 2016)

2. 3. Trend Analysis
The Nepse index created history yet again by reaching an all time height at the end of last week. The index
gained 8.5 points (or up 0.65%) to close at 1326.53. It corrected itself on Monday by sliding 6.68 points. It
crossed its immediate resistance level of 1320, which indicates that the bullish momentum is still present in
the market. Furthermore, the 50 days moving average is still running above 200 days moving average,
indicating that Nepse is still on a bullish trend.
4. Resistance and Support
Immediate Support 1318
Support 2 1257
Immediate Resistance 1350
Resistance 2
The Nepse index broke the immediate resistance level of 1320 at the end of last week, as it closed at
1326.53. Currently, the new immediate support level stands at 1318 and the new immediate resistance
level stands at 1350, which is considered to be a psychological barrier.
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 the week, stood at 23.35 and 22.81 respectively. The
lines continue to move close to each other as the average difference between the lines is 0.61 points,
where the macd line is just below the signal line. The lines have been moving close together, as well as in
a constant direction for over a month. By the end of the week, the macd and the signal line closed at 22.23
and 22.52 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 continues to remain above the overbought zone of 70 levels. The RSI was at 85.58 level at the
beginning of the week. Although it fell to 77.90 level in the course of the week, it climbed back up to
close at 82.11 level. The RSI indicates that the market is still in a bullish run, and shows no signs of
slowing down.
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 has been hovering on and off the upper band for over a month, indicating
overbought condition in the market. Currently, the index is close to the upper band, and as history has
shown us, it could touch the upper band once again. This further supports the bullish momentum present
in the market. The distance between the upper and lower bands remains constant, signifying moderate
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

4. 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.
As evident from the graph above, the On-Balance Volume (OBV) is climbing up at a much faster rate as
compared to the gain witnessed by Nepse. This signifies that the volume supports the rise in the Nepse
index. The average weekly volume transactions decreased to NPR 80.83 crores from NPR 87.47 crores
the week prior. However, at the beginning of last week, the volume transaction stood at a staggering
100.084 crores, which is the highest it has seen since the announcement of the monetary policy.
7. Overview
The Nepse index gained 8.5 points (or up 0.65%) to close at 1326.53. The 50-day and 200-day moving
average continue to climb up along with the benchmark index, indicating that the overall market condition
looks good. The macd line and the signal line continue to move alongside each other. The RSI continues to
signal high buying pressure in the market as it is hovering at 82.11 level. The RSI remaining at an overbought
condition for a long time period indicates the presence of a bullish run. The Bollinger bands show presence of
moderate market volatility as the distance between the lines remain constant. The new support and resistance
level stands at 1318 and 1350 respectively.

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