What If the Market Moves in?

The given article provides an analysis of the NEPSE Index and potential market patterns going forward. It is crucial to remember that market patterns can offer insightful information, and market movements can be unpredictable and affected by a variety of factors. Therefore, before making any investment decisions, readers are strongly recommended to undertake in-depth research and consult with financial specialists. This material is solely meant to be used for education.

“…all the fluctuations in the market and in all the various stocks should be studied as if they were the result of one man’s operations. Let us call him the Composite Man, who, in theory, sits behind the scenes and manipulates the stocks to your disadvantage if you do not understand the game as he plays it; and to your great profit if you do understand it.”

- (The Richard D. Wyckoff Course in Stock Market Science and Technique, section 9, p. 1-2)

1. Volume and Trend analysis

NEPSE Index has been showing positive indications for long-term buying. As we can observe, as the price decreased from W to X volume also decreased. Similarly, as price increased from Y to Z volume has also increased positively. Having said that, the market is in a sideways direction with defined support and resistance respectively.

2. Short-term Trading Strategy

As the price drops to the alert level “that is” 1923.40 which is also considered a Point Of Interest/ Order Block zone, as a trader we must be alert or ready to take a long position only if the market structure fulfills certain criteria in the one-hour time frame in the market. The criteria may include volume analysis, price action analysis, and many more. If only the criteria are fulfilled a trader can take entry into the market and take profit at the recent resistance level or more as per individual analysis and place the stop loss below the support level respectively.

3. Market Overview 

The trend line is in the down direction creating Lower Highs and Lower Lows. The recent market is sideways creating strong support and resistance level. Fake Breakout has been recently observed. As per Elliot Wave theory, NEPSE may be in level 4 trying to form level 5 at a random zone (Random Zone is a price level where the price is undefined).

Conclusion

What if NEPSE is still in a bearish trend where the price may break the support level forming a new Lower Low? Similarly, what if NEPSE may break the resistance level creating a new Higher High and reversing the trend to a bullish trend? Thus, as an investor, one should always know their edges and take responsibility for their action with a positive mindset and a calculated amount of risk.

Authored by

Praful Shrestha