Technical Analysis Of Nepse (24 February - 2 March 2014)

 

Market Trend

Nepse continued its fourth straight week of positive gains as the stock market rose up by 3.03 points (0.38%) last week. The majority of the gains came on Sunday as Nepse gained 9.19 points, which also happened to be the only positive day of the week. The three days that followed saw the market end in the negative zone. However, Nepse is still trading above the 50-day moving average and below the resistance of 847.86. If political climate remains fairly positive along with good financial results from companies, the market may be in further upside in the days to come. 

 

RSI

RSI is one of the leading indicators that are 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 indicator which was settled at 76.17 levels on February 23 (Sunday) began to steadily decline to end at 70.18 levels by the end of last trading day (Wednesday). This indicator shows that the market is slightly overbought in recent times.

 

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, which had been witnessing a declining trend since the third week of January 2014, crossed above the signal line on February 17, 2014. The MACD line is currently trending above the signal line at 15.61 and 13.71 points respectively. This suggests that the near term moving average (or the MACD line) is moving upward with a greater momentum than the longer term moving average (or signal line).

 

On Balance Volume (OBV)

On Balance Volume is a momentum indicator that relates volume to the current price of index or security. If a price increase is supported by OBV, it confirms an uptrend, whereas if a price decrease is supported by OBV, it confirms a downtrend. In the past week, Nepse increased slightly while the OBV indicator followed a similar pattern. At present, the volume has been supporting the current trend.

 

Market Summary

(February 23 to 26, 2014)

Close (Feb 26, 2014): 825.70

High (Feb 23, 2014): 831.86

Weekly Change: 3.03 (0.38%)

Daily Average Turnover: NPR 369.9 Million 

Total Weekly Turnover: NPR 1479.52 Million 

Immediate Support: 806.82

Immediate Resistance: 847.86

RSI: 70.18

MACD Line: 15.61

Signal Line: 13.71