Weekly Technical Analysis of NEPSE index ; know the market trend, support and resistance for next week
Fri, Aug 3, 2018 8:10 AM on Stock Market, Technical Analysis, Video Tutorials, Weekly Analysis,
NEPSE index is in the sideways market since the last two weeks, small bodied candles are formed. This week's market movement is the perfect example of a sideways market. On the first day of the week, NEPSE gained 3.62 points, on the second day it lost 0.44 points, on the third day it lost 2.91 points, on the fourth day it gained 2.4 points and on the last trading day it lost 2.56 points. It seems like the calm before the storm.
Technical Analysis of NEPSE index.
We have used Candlestick pattern, Exponential Moving Averages ( EMA), Volume Chart, Relative Strength Index (RSI), Moving averages convergence and divergence (MACD) for the analysis.
Candlestick Analysis:
On the monthly candlestick (July), kind of dozi has formed though it was not perfect dozi. The movement of 66 points has formed a body of 8 points, this month. Last month (June) the index has lost 109 points and has formed a bearish marubozu. Formation of small body candle after the 109 points long marubozu is definitely opposing the downtrend.
On the weekly candlestick, the perfect dozi has formed. Last two week's candles are expressing an indecisiveness in the market.
A special candle is not observed in daily candlestick pattern but the body of candles are relatively very small this week.
Candlestick patterns are opposing the current major trend.
Exponential Moving Averages (EMA)
We have used three EMA's of 5 days (red line), 20 days (green line) and 180 days (black line).
All the EMA's are above the NEPSE index, however, the 20 days and 5 days are very close to NEPSE index's value. 180 days moving average is far above the NEPSE index value that shows the long-term trend is still bearish.
From EMA analysis, no clear signal for short-term and mid-term trend was observed.
Bollinger Bands
Figure below shows the Bollinger bands with the NEPSE index main chart.
The space between the upper band (blue line, at the upper side of the blue shaded area) and the lower band (blue line, at the lower side of the blue shaded area) is in the decreasing trend. The middle line (red line) is above the NEPSE index value.
From Bollinger bands, a soft signal for the short-term downtrend trend is observed furthermore it is giving a signal for the low volatile period.
Nothing special is observed from the volume chart and RSI indicator this week
MACD
MACD with the NEPSE index main chart is shown below.
Value of MACD is continuously increasing although it is negative now. MACD is showing the weakness in the current downtrend. The MACD (blue line) is above the signal line (red line) which shows the possibility of reversal of the market trend.
Conclusion
The long-term market trend is downward but short-term and mid-term trend is unsure. Candlestick pattern is giving a strong signal for the end of the current trend.
Prediction
We predict a sideways market for next week.
The major resistance is in the range of 1244-1285 and major support is in the range of 1170-1130 points.
This week NEPSE's statistics:
Index open- 1191 Index closed- 1191
High – 1199 Low – 1190
Total Turnover – Rs 1.07 arba
Total number of Transaction- 15310
Total shares traded- 40.54 lakhs
Support and Resistance for next week from the Pivot Points.
Pivot Point – 1193 points
1st Resistance – 1196 points 1st Support – 1187 points
2nd Resistance – 1202 points 2nd Support – 1184 points.
This week’s market summary in Tabular form.
Movement of Indices and Sub-indices
Top 10 Gainers and Losers of the week
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Top 10 Companies with the Highest Turnover, Transaction and Traded shares
Top Buy and Top Sell companies of Top 10 broker of the week
