NEPSE at All-Time High; About Two Dozen Companies Hit Positive Circuit; Where Are We Headed? (With Technical Analysis of the Index)

The NEPSE index gained 31.87 points today and closed at 2,374.64. This is the highest closing-ever in the history of NEPSE. The index has been breaking records and creating new highs for a long, and there seems to be no stopping.

The index opened at 2,372.86 today and made an intraday-low at 2,354.70. Although the index went as high as 2,376.13, it ultimately closed at 2,374.64.

Interestingly, 2,376.22 is the 1.618 level of the Fibonacci Retracement scale we draw from the highest high of the previous bullish cycle (1,888.36) and the lowest low the index has reached after that point (1098.95). This is a strong resistance zone. Hence, the NEPSE index is at one of the most critical points ever. Technical analysts will be closely watching whether the index will break out from this zone or go on a correction before resuming the primary bullish trend.

If the index breaks out from this zone, we can speculate the next target by looking at the chart pattern. If we observe from a chart reader's eye, we see that a bullish flag has formed in the NEPSE index.

In technical analysis literature, it is generally believed that the vertical height of the flagpole is the minimum vertical gain the stock/ index will have from the point of breakout. Thus, if the index crosses the resistance drawn by the Fibonacci retracement chart, perhaps the tip of the vertical scale is the next target.

Disclaimer: Like every other strategy, technical analysis does not work 100% of the time. Reader discretion advised.

18,105,671 shares traded hands via 69,333 transactions. The trading of 209 scrips brought the total market turnover to a little over Rs. 7.79 Arba. This is higher than yesterday's turnover of Rs. 6.21 Arba. While the float index gained 2.1 points and closed at 162.44, the Sensitive index is at 445.59 after gaining 2.59 points.

Nepal Life Insurance Company Limited (NLIC) has the highest individual scrip turnover of a little over Rs. 53.33 crores. The units of Siddhartha Investment Growth Scheme-2 (SIGS2) traded the most.

A total of 21 companies have technically hit a 10% positive circuit today.

Meanwhile, Narayani Development Bank Limited (NABBC) lost the most 6.7%.

Banking and Mutual Funds lost today, with Mutual Funds losing the most 0.43%. Among all other sectors that gained, Non-Life Insurance gained the most 4.94%.