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Nepse’s Technical Analysis (20 -26 January 2014)

  2 min 7 sec to read

 
Moving Averages (50 & 200-day) 
The diverging 50-day and 200-day MA still confirms the current bull trend which began in March 29, 2012. At present, there have not been any major reversal trends in the moving averages that indicate that the market may be heading in the opposite direction. The nearest support level of Nepse stands at 753.17 points while the next resistance level stands at 806.82 points. 
 
Relative Strength Index (RSI)
RSI as a leading indicator RSI is believed to be most effective during periods of sideways movement. In the present context, RSI has been on an overall declining trend suggesting decreasing buying pressure in the market. During the last trading day of the previous week, the RSI closed at 64.11 and has been maintaining within the neutral zone. This suggests that the current market is neither highly over-bought nor over-sold. 
 
Moving Average Convergence-Divergence (MACD)
Similar to the RSI, the MACD indicator has also been trending lower, however, at a greater momentum. Currently, the MACD chart is showing a form of divergence in Nepse. Since the first week of January, Nepse has been trending upwards while the MACD line has been accelerating in the downward direction. Thus, this can be considered as a bearish sign for Nepse in the near term. 
 
On Balance Volume (OBV)
OBV 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. Nepse reached 795.26 points on January 19, 2014 and then retraced lower. During the same timeframe, OBV also moved lower supporting the trend of Nepse. 
 
Market Summary 
(19 –23 January, 2014)
Close: 785.70
High: 795.26
Weekly Change : -8.94 (-1.13%)   
Daily Average Turnover: NPR 398.1 million
Total Weekly Turnover: NPR 1990.48 Million
Immediate Support : 753.17
Immediate Resistance : 806.82
RSI : 64.11
MACD Line : 18.98
Signal Line : 22.89

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