Nepse technical analysis sep 21 sep 24, 2014 (eng & nep)

Technical Analysis 1. Market Summary (as of Sept 26, 2014)

Nepse at close last week (Sept 24, 2014) 912.32

Nepse high last week (Sept 24, 2014) 912.32

Weekly Change 12.43 (or 1.38 %)

Daily Volume (Avg.) NPR 37.32 crores

Total Traded Amount (weekly) NPR 1.56 billion

Immediate Resistance 920.06

Immediate Support 866.25

RSI 43.82

MACD Line - 24.50

Signal Line - 26.21

2. Market Trend

Nepse (Jan 01, 2014 – Sept 26, 2014)

After eight continuous trading weeks of decline in the market, Nepse ended this week on a positive note. The market notched up 12.43 points (or 1.38 %) and Nepse closed at 912.32 points. The first two trading days saw the market decline, however, buying pressure was witnessed during the last two trading days. In recent times, investors have been unwilling to sell their scrips as the proceeds from sale would be received only after the Dashain festival. Nepse appears to be hovering between the support and resistance levels of 866.25 and 920.06 levels. The recent trend in Nepse does show that the market still appears volatile but has been on a stabilizing phase. The market volume remained almost unchanged as investors traded NPR 37.32 crores each day on average. This is a slight increase from the previous week when daily average volume reached NPR 36.59 crores.

3. 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. Though the RSI decreased in the beginning of the week, the indicator began moving up towards the centerline. By the end of the week, the RSI closed at 43.82 levels, which is 7.03 points higher when compared to the previous week. This shows that the market is maintaining within the neutral zone.

RSI (Dec 01, 2013 – Sept 26, 2014)

4. 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 indicator shows that there has been a gradual change in momentum in recent times. Similar to the previous week, the MACD line trended upwards indicating that the short-term momentum has been in the upward direction. The rate of decline in the Signal also decreased this week. The MACD line crossing above the Signal line represents a buy signal.

MACD (Dec 01, 2013 – Sept 26, 2014)

5. 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 recent rise in the stock market has caused the Nepse to nearly touch the mid-band. The lower band appears to be moving sideways causing the upper and lower bands to converge.

Bollinger Bands (Dec 01, 2013 – Sept 26, 2014)

Overview: Nepse finally ended on a positive note this week as the secondary market climbed up 12.43 points (or 1.38 %). This is a major improvement considering the high selling pressure witnessed in recent times. The volume did not see much improvement as the average daily volume increased from NPR 36.59 crores to NPR 37.32 crores this week. Nepse is currently hovering between its nearest support and resistance levels of 866.26 and 920.06 points. The RSI increased to 43.82 levels this week as it remained just below the centerline. The MACD indicator shows that the near term momentum in the market has been on an upward trend suggesting more buyers than sellers in recent times. According to the Bollinger Bands, the lower band appears to be moving sideways causing the upper and lower bands to converge. If Nepse moves past the mid-band, this would indicate a buy signal. Overall, the market appears stabilizing in recent times however with low volume. Hence, rise in volume is necessary for the market to make higher grounds.

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Nepse (Jan 01, 2014 – September 26, 2014)

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RSI (Jan 01, 2013 – September 26, 2014)

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MACD (Jan 01, 2013 – September 26, 2014)

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Bollinger Bands (Jan 01, 2013 – September 26, 2014)

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