Nepse Weekly Technical Analysis September 6 - September 10, 2015

1. TECHNICALANALYSIS
1. Market Summary (as of September 10, 2015)
NEPSE at close last week (September 10, 2015) 1168.71
NEPSE high last week (September 8, 2015) 1174.69
Weekly Change -0.69 points (or -0.06%)
Daily Volume (Avg.) NPR 43.54 crores
Total Traded Amount (weekly) NPR 217.70 crores
RSI 63.86
MACD Line 30.11
Signal Line 38.31
2. Nepse Figure
Nepse (June 1, 2014 – September 10, 2015)

2. 3. Trend Analysis
After a cross down of previous support level of 1175, Nepse followed a sideways movement throughout last
week. The convergence of Bollinger bands show decrease in market volatility. The benchmark index fell by a
meager 0.69 points in the course of last week. The market closed at 1166.69 at the beginning of last week, and
closed at 1168.71 by the end of the week. The announcement of bonuses by BFI’s could stop the market from
going downwards in the long-run.
4. Resistance and Support
Immediate Support 1150
Support 2 1125
Immediate Resistance 1200
At the end of last week, Nepse fell below its previous support level of 1175, and ended at 1168.71. The
current support and resistance stands at 1150 and 1200 level respectively.
Note: As per NRB directives, BFI’s are discouraged to announce cash dividend, causing investors to be
optimistic regarding the bank’s announcement of bonus and right shares. Last week Miteri development
bank has also announced 30% bonus to its shareholders.
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 declined throughout last week. The macd line is moving below the signal
line and the distance between the two lines has increased as well, indicating a bearish outlook of the
market. By the end of the week, the macd and signal lines ended at 30.11 and 38.31 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, at the beginning of last week, stood at 65.09 level. It followed a side-way movement through the
course of the week. It fell by a meager 1.23 points to end at 63.86 level. This shows that the market is
slowly decreasing its buying pressure. However, the long term trend still looks bullish as the RSI is
hovering around and above the 60’s level for a long period.
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 did not show much change last week. It moved closer towards the mid band,
signifying decrease in the over-bought condition in the market. The mid band has been acting as a strong
support level to Nepse. The upper and lower bands have converged significantly as well in the course of
last week, indicating a decrease 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 adds

4. 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.
Last week, the OBV (On-Balance Volume), as well as the benchmark index, followed a sideways movement,
showing a rather neutral stance. The average volume decreased last week, where as the index did not show
much change.The average weekly volume transactions decreased significantly to NPR 43.54 from NPR 63.61
crores the week prior
7. Overview
The Nepse index fell by a meager 0.69 points (or down 0.06%) last week to close at 1168.71. The index trend
followed a side-way movement last week. The 50-day moving average (MA) is still moving upward at a steep
rate, and also moving above the 200-day MA, indicating that the overall outlook of the market looks good.
The average weekly volume transactions decreased significantly to NPR 43.54 from NPR 63.61 crores the
week prior. The RSI ended at 63.86 level, which shows that the buying pressure in the market is further
decreasing. The Bollinger bands have converged significantly, indicating decrease in market volatility. The
support and resistance level still stands at 1150 and 1200 respectively.

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