Technical Analysis 1. Market Summary (as of Sept 05, 2014)

Nepse at close last week (Sept 04, 2014) 921.69

Nepse high last week (Aug 31, 2014) 952.6

Weekly Change - 50.48 (or - 5.19 %)

Daily Volume (Avg.) NPR 41.61 crores

Total Traded Amount (weekly) NPR 1.66 billion

Immediate Resistance 998.13

Immediate Support 917.58

RSI 31.57

MACD Line -23.27

Signal Line -14.48

2. Market Trend

Nepse (Jan 01, 2014 – Sept 04, 2014) Continuing with the bearish momentum from the previous weeks, Nepse once again ended lower this week. The secondary market fell by 50.48 points (or -5.19%) to close at 921.69 points. As a result, Nepse declined during all four trading days and has moved closer to its support level of 917.58 points. Nepse had tested this level on June 23, 2014, after which it continued its bullish phase reaching its high of 1083.55 points. The market has been on a consolidation phase bringing sellers into the market. The Nepse line is still below the 50-day moving average suggesting that investors have been pessimistic in general. Lack of consensus among political parties has also been a contributing factor to low confidence in the market. The fall in the market was accompanied by lower

volume as the daily average volume fell from NPR 50.56 crores last week to NPR 41.61 crores. For Nepse to get back to its path of bullish trend, it needs to cross above the 50-day moving average along with an increase in volume trend.

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. Due to the fall in Nepse this past week, the RSI also declined but managed to stay above the oversold zone. With low volume persisting, the market has not been able to gather enough momentum to move in the positive direction. By the end of the trading week, the RSI closed at 31.57 levels.

RSI (Dec 01, 2013 – Sept 04, 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. 21qThe MACD indicator fell slightly this week as well as the momentum remained in the downward direction. By the end of the week, the MACD line and Signal line closed at – 23.27 and – 14.48 points respectively. This shows that there has been greater selling pressure in recent times.

MACD (Dec 01, 2013 – Sept 04, 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 Nepse line has once again moved towards the lower band this past week suggesting oversold market conditions. This also represents lack of confidence among stock market participants. The lower band has also fallen sharply and as a result, there has been a greater divergence between the upper and lower bands – indicating higher volatility in the market.

Bollinger Bands (Dec 01, 2013 – Sept 04, 2014)

Overview: Nepse continued its downward trend this week as well with the stock market falling by a massive 50.48 points (or - 5.19%). This is one of the biggest weekly declines witnessed in recent times. The market also witnessed decline in volume as the daily average volume fell from NPR 50.56 crores last week to NPR 41.61 crores this week. Currently, Nepse is situated slightly above its support level of 917.58 points. The RSI currently stands at 31.57 levels suggesting that the market is slightly above the oversold region. While the MACD and Signal lines indicate that the near term momentum is still in the downward direction. The Bollinger Bands show that the market is also trending slightly above the lower band indicating that the market has remained within the oversold region during this week. Overall, Nepse is still maintaining above its 200-day moving average, however, the volume needs to be increased for the market to climb to higher levels.

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Nepse (Jan 01, 2014 – September 4, 2014)

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RSI (Jan 01, 2013 – September 4, 2014)

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Bollinger Bands (Jan 01, 2013 – September 4 28, 2014)

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