NEPSE Index Loses 2.69%, Bearish Engulfing on Candlestick Chart: Daily Market Summary

Mon, Dec 27, 2021 3:28 PM on Stock Market, Latest,

-ShareSansar

The NEPSE index closed at 2,521.65 today after losing 69.77 points from yesterday's closing. This is a loss of 2.69% on the index. The index had gained 71.2 points yesterday.

238 scrips traded hands via 67,760 transactions. The Float index is at 173.09 after losing 2.55% while the Sensitive index lost 2.25% and is now at 471.89.

Nabil Bank Limited (NABIL) had the highest turnover of Rs. 30.6 crores closing at a market price of Rs. 1,499 per share. The shares of Mega Bank Nepal Limited (MEGA) traded the most.

Gurkhas Finance Limited (GUFL) and Madhya Bhotekoshi Jalavidyut Company Limited (MBJC) gained 10%, hence hitting the positive circuit breaker. Meanwhile, Joshi Hydropower Development Company Limited (JOSHI) lost the most 8.54%.

All sectors closed red today. "Non-Life Insurance" lost the most 5.15%.

Technical Analysis Highlight

The index opened at 2,600.21 and created the intraday high at 2,615.29. It then went as low as 2,518.80, before closing at 2,521.65, i.e. very near the intraday low. This has led to the formation of an extended red candle on the candlestick chart whose real body engulfs the previous green candle's real body, hence creating the Bearish Engulfing pattern.

This pattern can be important because it shows sellers have overtaken the buyers and are pushing the price more aggressively down (today's red candle) than the buyers were able to push it up (yesterday's green candle). Hence, this is a bearish reversal pattern since it shows that the bears were able to take back control from the premature bulls.

Furthermore, a total of 10,292,226 shares exchanged hands amounting to Rs. 5.607 Arba in the turnover amount. This is higher than yesterday's turnover of Rs. 5.17 Arba. Thus, the engulfing is also supported by Volume. Note that the Bearish Engulfing pattern is of significance when it occurs after a price advance, which is true in this case, since the index had been gaining overall from the most recent low of 2,259.63.

The Relative Strength Index (RSI) is at 48.89. The reading was at 54.64 yesterday, breaking above 50 for the first time in a while. The "50" index-level crossover is believed to be indicating intermediate-term upwards momentum. However, the RSI has reverted back below the 50 mark today.

Meanwhile, both the MACD line and the signal line are still negative, i.e. below zero, with the MACD reading at -44.31. This reading was at -51.35 yesterday. The MACD line has crossed over the signal line last week, indicating a mild bullish sentiment. However, the crossover would have been more significant if the MACD reading was positive.