TECHNICAL ANALYSIS

1. Market Summary (as of Feb 27, 2015)

Nepse at close last week (Feb 26, 2015) 979.27

Nepse high last week (Feb 26, 2015) 979.27

Weekly Change -3.38 (or -0.34%)

Daily Volume (Avg.) NPR 21.65 crores

Total Traded Amount (weekly) NPR 1.08 billion

Immediate Resistance 1036.98

Immediate Support 972.17

RSI 58.08

MACD Line 7.25

Signal Line 11.33

2. Market Trend

Nepse (Jan 01, 2014 – Feb 26, 2015)

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. The RSI declined slightly this week and maintained

within the neutral zone. On Wednesday, the RSI had fallen to 51.73 levels. However, by the close of

the trading week, the RSI spiked up to 58.08 levels.

RSI (Jan 02, 2014 – Feb 26, 2015)

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 line was

below the Signal line the week prior, and it continued the downward momentum by the end of this

week. Currently the MACD seems to be moving towards zero line. Crossing the zero line would

indicate a sell signal in the market.

MACD (Jan 02, 2014 – Feb 26, 2015)

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 slightly dropped at the

beginning of the week, touching the lower-band. It however moved upward by the last trading day,

touching the mid-band. The upper and the lower bands have also significantly converged indicating

decreasing volatility in the market.

Bollinger Bands (Jan 02, 2014 – Feb 26, 2015)

Overview:

Nepse ended on a negative note this week as it closed lower by -3.38 points (or -0.34%) to end at

979.27 points. Although Nepse increased on the last day, it still ended in the red zone. The average

daily market volume declined this week to NRP 21.65 crores from NRP 29.74 crores the week prior.

The 50-day moving average is still increasing at a higher rate above the 200-day moving average

suggesting that the overall view of the market remains positive. The RSI declined to 58.08 levels and

maintained within the neutral zone. The MACD line is moving below the signal line towards the zero

line indicating that the overall market momentum remains in the downward direction; however, if this

line crosses below the zero line, this would indicate a sell trigger. The Bollinger Bands indicate a

decline in the market volatility as Nepse moved closer to the mid-band. Nepse has been able to

maintain above its support level of 972.17 points during the past three weeks. If Nepse falls below this

support level with increasing volume, the next closest support level stands at 938.41 points.

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Nepse (Jan 01, 2014 – Feb 26, 2015)

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RSI (Jan 02, 2014 – Feb 26, 2015)

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MACD (Jan 02, 2014 – Feb 26, 2015)

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Bollinger Bands (Jan 02, 2014 – Feb 26, 2015)

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