Monthly Technical Analysis of Nepse March 24th 2019 – April 22th 2019

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Monthly Technical Analysis of Nepse March 24th 2019 – April 22th 2019

Bullish Indicators
 
Trend Analysis
NEPSE gained 116.34 points (or up 10.20%) to close at 1250.94 last month that ended on April 22. Last month, NEPSE showed a bullish momentum breaking the resistance level of 200 days moving average. Currently, NEPSE is trading above the 50 days moving average and 200 days moving average. The average daily volume turnover has increased to NPR 53.01 crores from NPR 30.26 crores. NEPSE broke out from the neckline of inverted head and shoulder pattern. NEPSE also traded outside of the short term trend line.
 
Resistance and Support
 
 
In course of month, NEPSE index showed bullish momentum for most of the days breaking the resistance level of 1215. NEPSE reached the high level of 1264.2 and closed at 1256.94. The average traded volume was higher than the previous month indicating an increased market participation. The immediate support and resistance have changed to 1215 and 1290 respectively.
 
Nepse 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, at the beginning of last month, stood at 4.29 and 0.02 respectively. By the end of the month, MACD line and signal increased by 22.26 and 17.99 to close at 26.56 and 18.01 respectively. The MACD line and signal line are hovering around the positive zone and the distance between MACD and signal line has widened indicating a bullish sentiment in the market.
 
 
b. 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, at the beginning of last month, stood at 51.57 level. In the course of month, RSI increased by 28.21 points to close at 79.79. Last month, RSI broke the resistance of 66 and 73 level, reached the high point of 84 and closed at 79.79. Currently, NEPSE is trading at 79.79 RSI level indicating NEPSE is trading at overbought zone.
 
 
c. OBV
On balance volume is a momentum indicator that uses volume flow to predict changes in stock prices. It measures buying and selling pressure as a cumulative indicator that adds volume in up days and subtracts volume on down days.
 
The on-balance volume, at the beginning of last month, stood at -13.6 b level. In the course of month, it gained 4.6 b points to close at -9.00 b. Last month, OBV has increased by 4.6 b indicating an increase in buying pressure in the market.
 
 
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.
 
At the beginning of month, NEPSE index traded from the mid Bollinger band to the upper Bollinger band. At the mid-month, NEPSE traded at the upper Bollinger band for most of time indicating a bullish expansion in the market. NEPSE traded outside of the upper Bollinger band on the last day of month. The distance between upper Bollinger and lower Bollinger band has increased indicating a high volatility in the market.
 
 

 
e. Overview
NEPSE gained 116.34 points (or up 10.20%) to close at 1250.94 last month. Currently, NEPSE is trading above the 50 days moving average and 200 days moving average. The MACD line and signal line are hovering around the positive zone and the distance between MACD and signal line has widened indicating a bullish sentiment in the market. NEPSE is trading at 79.79 RSI level indicating NEPSE is trading at overbought zone. Last month, OBV has increased by 4.6 b indicating an increase in buying pressure in the market. The distance between upper Bollinger and lower Bollinger band has increased indicating a high volatility in the market. The immediate support and resistance have changed to 1215 and 1290 respectively. 
 

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