- The Nepse index fell by 65.04 points (3.73%) last week to close at 1697.17 due to bearish sentiment from interest rate hikes and India's currency ban. - Technical indicators like MACD, RSI, and Bollinger bands show the market is in a bearish state with increased volatility. - The new support and resistance levels have been established at 1675 and 1800 respectively as the index broke below previous support of 1730.

1. TECHNICAL ANALYSIS
1. Market Summary (as of November 10, 2016)
NEPSE at close last week (November 10, 2016) 1697.17
NEPSE high last week (November 7, 2016) 1749.12
Weekly Change -65.04 points (or -3.73%)
Daily Volume (Avg.) NPR 71.16 crores
Total Traded Amount (weekly) NPR 284.64 crores
RSI 29.76
MACD Line -16.94
Signal Line -7.50
2. Nepse Figure
Nepse (May 1, 2015 – November 10, 2016)

2. 3. Trend Analysis
The Nepse index lost a staggering 65.04 points (or down 3.73%) last week to close at 1697.17. The index
ended in the red for majority of last week. However, towards the end of the week, it gained a tiny 0.31 points
to end in the green. The index has fallen further below from the 50-day moving average, indicating bearish
presence in the market. It seems that interest rate hike, and India’s ban on 1000 and 500 IC notes may have
caused investor sentiment to be bearish. The average volume turnover decreased to NPR 71.16 compared to
82.43 crores the week prior.
4. Resistance and Support
Immediate Support 1675
Support 2 1635
Immediate Resistance 1800
Resistance 2 1880
The Nepse index broke the support level of 1730 during the beginning of last week. Currently the new
support and resistance level stands at 1675 and 1800 respectively. As current environment seems
unfavorable to investors, the index could further fall closer to the new support level.
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 -6.03 and -1.50 respectively. In the
course of the week, the macd line decreased by 10.91 points and signal line by 5.99 to close at -16.94 and
-7.50 respectively. Both the lines have reached their lowest level since the beginning of the year. The
macd indicator show bearish sentiment in 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 41.01 points. In the course of the week, it lost 11.25
points to close at 29.76 level. The RSI has entered below the 30’s zone, which signifies over-sold
condition 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.
The benchmark index fell below the lower bollinger band in the course of last week. Such movement
indicates selling pressure in the market. The upper and lower bands are starting to diverge as well,
signifying and rise in market volatility.

4. 6. Overview
The Nepse index declined by 65.04 points (or down 3.73%) to close at 1697.17 last week. Nepse has dropped
below the 50-day moving average, which shows bearish investor sentiment. The technical indicators also
show presence of bearish run in the market. However, this could also be an opportunity for investors to buy
stocks at low prices. 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 29.76 level. The bollinger bands show signs of an increase in
market volatility. The new support and resistance level now stands at 1675 and 1800 respectively.

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