Technical analysis of Nepal Stock Exchange (Nepse) index for the week from Nov 09, 2014 to Nov 13, 2014. The technical analysis includes summary, RSI, MACD and Bollinger band analysis. The analysis is done by Kriti Capital & Investments Ltd.

1. Technical Analysis
1. Market Summary (as of Nov 14, 2014)
Nepse at close last week (Nov 13, 2014) 881.04
Nepse high last week (Nov 09, 2014) 895.41
Weekly Change - 23.88 (or - 2.64 %)
Daily Volume (Avg.) NPR 22.54 crores
Total Traded Amount (weekly) NPR 1.13 billion
Immediate Resistance 917.58
Immediate Support 866.25
RSI 33.93
MACD Line - 11.28
Signal Line - 8.12
2. Market Trend
Nepse (Jan 01, 2014 – Nov 13, 2014)
After the market decline witnessed during the previous week, Nepse ended lower once again this
week. Of the five trading days Nepse was only able to end on a positive note just once this week. As a
result, the market lost 23.88 points (or - 2.64%) to end at 881.04 points. The average daily volume
saw a slight increase this week to NPR 22.54 crores from NPR 21.61 crores the week prior. Once
again, Nepse has moved closer to its support level of 866.25 points which has been tested multiple
times before. The index has also just touched the 200-day moving average. If this line crosses below
the moving average, it would provide a sell signal in the market. Hence, moving forward, it will be
very important for Nepse to maintain above its support level as well as the 200-day moving average.

2. 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. With the recent downtrend in Nepse, the RSI
has reached 33.93 and is inching closer to the oversold zone. This indicates a higher selling pressure
in the markets in recent weeks.
RSI (Dec 01, 2013 – Nov 13, 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
followed a downward trend since the MACD line crossed below the Signal line the week before. As a
result, the MACD and Signal lines closed at - 11.28 and - 8.12 points respectively.
MACD (Dec 01, 2013 – Nov 13, 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. With the overall downward trend, the
Nepse line has followed the lower band in the downward direction. This has caused the upper and
lower bands to deviate away from the mid-band indicating higher volatility in the market.

3. Bollinger Bands (Dec 01, 2013 – Nov 13, 2014)
Overview:
Continuing with the trend from the previous week, Nepse once again followed a downward trend.
There has been a lack of enthusiasm among investors as the political process appears to be stalled in
recent times. As a result, the stock market closed down 23.88 points (or - 2.64%) to end at 881.04
points. The average daily volume saw a slight increase this week to NPR 22.54 crores. Nepse is
inching closer to its support level of 866.25 points as well as the 200-day moving average, a drop
below which would indicate a sell signal. The RSI stands at 33.93 levels suggesting Nepse is moving
towards the oversold zone while the MACD indicator shows an overall downward momentum. The
Bollinger Bands suggest rising volatility in the market. Overall, there has been higher selling pressure
in the market and it may slide further if it crosses below the 200-day moving average.

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Nepse (Jan 01, 2014 – November 14, 2014)

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RSI (Jan 01, 2013 – November 14, 2014)
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MACD (Jan 01, 2013 – November 14, 2014)
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6. Bollinger Bands (Jan 01, 2013 – November 14, 2014)
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