- The Nepse index gained 17.27 points last week to close at 1318.03, reaching a new all-time high and close to the immediate resistance level of 1320. - Most technical indicators continue to signal bullish momentum, with the RSI hovering above 70 and the MACD line moving above the signal line. - Volumes increased compared to the previous week, supporting the index's upward movement, while the Bollinger bands show a minor rise in volatility.

1. TECHNICAL ANALYSIS
1. Market Summary (as of March 10, 2016)
NEPSE at close last week (March 10, 2016) 1318.03
NEPSE high last week (March 10, 2016) 1318.03
Weekly Change 17.27 points (or 1.32%)
Daily Volume (Avg.) NPR 87.47 crores
Total Traded Amount (weekly) NPR 174.94 crores
RSI 85.41
MACD Line 22.86
Signal Line 22.67
2. Nepse Figure
Nepse (June 1, 2014 – March 10, 2016)

2. 3. Trend Analysis
The Nepse index continued to create history by reaching all time height every trading day of last week.
Although Nepse traded for two days last week, it gained 17.27 points (or up 1.32%) to close at 1318.03. As
mentioned in the previous article, the insurance sector surged to become the top gaining sector, causing the
benchmark index to rise further. The index reached close to its immediate resistance level of 1320. 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 1257
Support 2 1216
Immediate Resistance 1320
Resistance 2
Last week Nepse index created new height at the end of every other trading day. Nepse is moving above
the 1300 mark since last week. As the market continues to be on a bullish run, the index will likely
surpass the resistance level of 1320. As nepse index reached close to immediate resistance level, it may
take correction 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 the week, stood at 21.98 and 22.63 respectively. The
average difference between the lines is 0.46 points, where the signal line is just below the macd line. If
the macd line moves further up and above the signal line, it will support the bullish momentum present in
the market. By the end of the week, the macd and the signal line closed at 22.86 and 22.67 respectively.
b.) RSI

3. 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 has remained above the 70’s level for more than a month, and it shows no signs of falling below
that level. The RSI at the beginning of the week stood at 82.87. By the end of the week, it it gained 2.54
points to close at 85.41. Such high buying pressure in the market signifies that the market is still in a
bullish run.
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 is moving alongside the upper Bollinger band, which indicates overbought
condition in the market. All of the bands continue to climb up, showing a presence of bullish momentum.
The distance between the upper and lower bands has diverged slightly, which signifies a steady gain in
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) has climbed up at a faster rate as compared to the climb experienced by
Nepse. Such indicators show that the increase in volume supports the gain in Nepse. Although Nepse
traded for two days last week, the average weekly volume transactions increased to NPR 87.47 crores
from NPR 55.91 crores the week prior.
7. Overview
With just two days of trading, Nepse index gained 17.27 points (or up 1.32%) to close at 1318.03. 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 RSI continues to signal high buying pressure in the market as it is hovering
at 85.41 level. The RSI remaining at an overbought condition for a long time period indicates the presence of
a bullish run. The macd line is moving just above the signal line. The Bollinger bands show a minor increase
in the market volatility as the distance between the upper and lower bands has diverged. The support and
resistance level stands the same at 1257 and 1320 respectively.

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