- The Nepse index reached a new all-time high of 1357.14 last week, gaining 30.61 points or 2.29% over the previous week. - Moving averages and indicators like MACD and RSI suggest the market is in a bullish trend. - Trading shifted from insurance and microfinance sectors to banking last week. - The new support and resistance levels for the index are 1350 and 1390 respectively.

1. TECHNICAL ANALYSIS
1. Market Summary (as of March 24, 2016)
NEPSE at close last week (March 24, 2016) 1357.14
NEPSE high last week (March 24, 2016) 1357.14
Weekly Change 30.61 points (or 2.29%)
Daily Volume (Avg.) NPR 86.24 crores
Total Traded Amount (weekly) NPR 344.95 crores
RSI 86.61
MACD Line 25.74
Signal Line 23.84
2. Nepse Figure
Nepse (June 1, 2014 – March 24, 2016)

2. 3. Trend Analysis
The Nepse index climbed up further, creating a new height of 1357.14 at the end of last week. The index
crossed its immediate resistance level of 1350 by gaining 30.61 points (or up 2.29%) in the course of last
week. It corrected itself again on Monday by sliding 1.86 points. The 50 days moving average is still running
above 200 days moving average, indicating that Nepse is still on a bullish trend. Last week nepse’s trading
and volume show that investors are moving from insurance and microfinance sector to banking sector as the
volume on insurance and microfinance decreased along with corresponding sub index. Whereas the banking
index picked up in terms of volume and index. Hence, the banking sub index could cause Nepse to climb up
next week.
4. Resistance and Support
Immediate Support 1350
Support 2 1257
Immediate Resistance 1390
Resistance 2
The Nepse index broke the immediate resistance level of 1350 at the end of last week, closing at 1357.14.
The benchmark index crossing the psychological barrier of 1350 level shows that bullish momentum is
strongly present in the market. This could lead the market to climb further up. Currently, the new
immediate support and resistance level stands at 1350 and 1390 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 the week, stood at 23.57 and 22.73 respectively. The
lines are slowly starting to diverge as the average difference between the lines has increased to 1.32
points, where the macd line is moving above the signal line. This supports the positive momentum present
in the market. Towards the end of the week, the macd and the signal line closed at 25.74 and 23.84
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, at the beginning of last week, stood at 85.74 level. It gained a minute 0.87 points to close at
86.61 level at the end of the week. RSI continues to remain above the 70’s zone, which signifies high
buying pressure in the market. However, it has remained above that level for over a month, which shows
a strong bullish presence 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.
As mentioned in the previous article, the benchmark index has touched the upper Bollinger band again,
indicating an over-bought condition in the market. All of the bands continue to move in an upward
direction. The upper and lower bands are showing signs of divergence, signifying a moderate increase in
the market 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.
The On-Balance Volume (OBV) continues to climb up at a much steeper rate as compared to the climb
witnessed by Nepse index. This goes to show that the volume supports the rise in the benchmark index.
The average weekly volume transactions increased to NPR 86.24 crores from NPR 80.83 crores the week
prior.
7. Overview
The Nepse index gained 30.61 points (or up 2.29%) to close at 1357.14. 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 is starting to move above the signal line, supporting the bullish sentiment in the
market. The RSI continues to signal high buying pressure in the market as it is hovering at 86.61 level. The
RSI remaining at an overbought condition for a long time period indicates a strong presence of a bullish run.
The Bollinger bands signal a moderate increase in market volatility as the distance between the upper and
lower bands has diverged slightly. The new support and resistance level stands at 1350 and 1390 respectively.

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