The Nepse index fell by 124 points last week closing at 1534, indicating bearish market sentiment. Technical indicators like MACD, RSI and Bollinger bands also show bearish signals, with MACD line below the signal line in negative territory and RSI at its lowest level since 2015. The new support and resistance levels are 1480 and 1630 respectively. Overall, technical analysis suggests the market will likely see more declines in the coming days.

1. TECHNICAL ANALYSIS
1. Market Summary (as of November 24, 2016)
NEPSE at close last week (November 24, 2016) 1534.03
NEPSE high last week (November 21, 2016) 1606.29
Weekly Change -124.05 points (or -7.66%)
Daily Volume (Avg.) NPR 101.39 crores
Total Traded Amount (weekly) NPR 506.99 crores
RSI 14.71
MACD Line -54.71
Signal Line -36.42
2. Nepse Figure
Nepse (May 1, 2015 – November 24, 2016)

2. 3. Trend Analysis
The Nepse index fell by a staggering 124.05 points (or down 7.66%) to close at 1534.03. The index remained
in the green on Monday as it gained 6.67 points to close at 1606.29. Nepse is currently below the 200-day
moving average, which indicates bearish sentiment in the market. Various reasons relating to currency,
liquidity, and political unrest could have pushed the market into a bearish zone. The average volume turnover
increased slightly to NPR 101.39 crores from NPR 100.49 crores the week prior.
4. Resistance and Support
Immediate Support 1480
Support 2 1350
Immediate Resistance 1630
Resistance 2 1760
The Nepse index broke the support level of 1635 at the beginning of last week. Furthermore, Nepse broke
support level 2 of 1600 in the course of last week. Currently the new support and resistance level stands at
1480 and 1630 respectively. As strong bearish sentiment looms over the market, the index could see more
red days in days to come.
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 -32.51 and -20.37 respectively. In the
course of the week, the macd line decreased by 22.20 points and signal line by 16.05 to close at -54.71
and -36.42 respectively. The macd indicator gives a bearish signal as both the lines are in the negative
territory, and macd line below the signal line.
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 17.89 points. In the course of the week, it lost 3.18 points
to close at 14.71 level. The RSI has entered below the 30’s zone for past six days, signifying oversold
condition in the market. The RSI has reached its lowest level since the devastating earthquake in 2015.
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 continues to fall below the lower bollinger band in the course of last week,
indicating selling pressure in the market. The distance between the lower and upper bands has diverged,
signifying and increase in market volatility.

4. 6. Overview
The Nepse index declined by 124.05 points (or down 7.66%) to close at 1534.03 last week. Nepse has moved
below the 200 day moving average, showing that the market is entering a bearish territory. All of the technical
indicators support the bearish momentum in the market. The macd is moving below the signal line, and is
hovering in the negative territory. The RSI has entered the over-sold zone, ending at 14.71 level. The
bollinger bands continue to show an increase in high market volatility. The new support and resistance level
now stands at 1480 and 1630 respectively.

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