Monthly Technical Analysis of Nepse(May 22nd 2019 – June 20th 2019)

 0   201 times read   4 min 17 sec to read
Monthly Technical Analysis of Nepse(May 22nd 2019 – June 20th 2019)

Bearish Sentiment

Trend Analysis
NEPSE lost 47.78 points(or down 3.64%) to close at 1264.36 last month. Last month, NEPSE broke the support level of 50 days moving average and traded below the 50 days moving average.

However, NEPSE is still trading above the 200 days moving average. The average daily volume turnover has decreased to NPR 64.62 crores from NPR 94.38 crores. NEPSE formed a shooting star candle on May 30. As an effect of shooting star candle, NEPSE showed a bearish momentum and broke the support level of 10 days exponential moving average. NEPSE is hovered at around 38.2% retracement level of recent upswing from 1102.64 to 1349.38.

Resistance and Support

Last month, NEPSE showed a bearish momentum for most of days. During a course of month, NEPSE broke the support level of 1290, reached the low level of 1254.52 and closed at 1264.36. The average traded volume was lower than the previous month indicating a decreased market participation. The immediate support and resistance have changed to 1230and 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 25.90 and 29.41 respectively. By the end of the month, MACD line and single line decreased by 32.48 and 30.50 to close at -6.58 and -1.09 respectively. The MCAD line and signal line have entered in the negative zone indicating a bearish 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 66.94 level. In the course of month, RSI decreased by 26.30 points to close at 40.64. Last month, RSI broke the support level of 66 level, bounced back from 35 level and closed at 40.64. Continuous fall of RSI indicates a presence of bearish sentiment in the market. But small pick from 40 level gives indication of trend reversal.

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 -6.1b level. In the course of month, it lost 0.9b points to close at -7.0 b. Last month, OBV has decreased by 0.9b indicating a selling pressure in the market.

d. Bollinger Bands
The Bollinger Band is a technical indicator that consists of a moving average (20-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 last month, NEPSE index traded from the upper Bollinger band to the lower Bollinger band breaching the support level of mid Bollinger band. NEPSE traded at the lower Bollinger band for most of time indicating a bearish expansion in the market. At the end of last month, NEPSE bounced back from the lower Bollinger band.  The distance between upper Bollinger band and lower Bollinger band has increased indicating a high volatility in the market.

e. Overview
NEPSE lost 47.78 points (or down 3.64%) to close at 1264.36 last month. Currently, NEPSE is trading below the 50 days moving average. However, NEPSE is till trading above the 200 days moving average. The MCAD line and signal line have entered in the negative zone indicating a bearish sentiment in the market. Continuous fall of RSI indicates a presence of bearish sentiment in the market. OBV has decreased by 0.9 b indicating a selling pressure in the market. The distance between upper Bollinger band and lower Bollinger band has increased indicating a high volatility in the market. The immediate support and resistance have changed to 1230 and 1290 respectively.

No comments yet. Be the first one to comment.
"