Weekly Summary: NEPSE Index Rests At Support With Decline in Volume; Reversal or Continuation?

Fri, Jul 9, 2021 3:33 PM on Weekly Analysis, Stock Market,

-ShareSansar

This week Nepse Index made a 64.2 points volatility with the market reaching the highest 2857.63 and the lowest 2793.43. On Sunday the index reached a high of 2857.63. The index lost a minimal 17.9 points (0.63%) in this trading week. Last week market closed at 2843 points and this week closed at 2825.10 points on Thursday.

Candlestick pattern:

A type of spinning top candle has formed on a weekly chart. This week also small body having candle has been formed. The candlestick pattern represents indecisiveness about the future direction and also represents decreasing volatility.

Exponential Moving Average:

We have used EMA's of 5 days' time period (blue line), 20 days' time period (red line). At present, NEPSE Index is below both 5 days EMA and 20 days EMA. Values below moving average signal for bearishness. Recently, 20-days Moving Average has crossed above its 5-days Moving Average from below forming a Dead crossover.

Relative Strength Index:

Relative Strength Index is a momentum oscillator that measures between zero and 100. Currently, the Relative Strength Index is at the 46.64 level. Traditionally the RSI is considered overbought when above 70 and oversold when below 30. A formation of bearish divergence is seen in RSI on the weekly chart as the index is making higher highs but RSI is making higher lows.

Moving Average Convergence and Divergence:

MACD line (blue) and the signal line (red line) are in the negative zone. MACD line is below the signal line. A histogram is also in the negative zone. Overall MACD is indicating downward momentum.

Turnover

Support and resistance level for the next trading week according to Pivot Point.

Pivot Point- 2825

1^st Resistance- 2857 1^st Support- 2793

2^nd Resistance- 2889 2^nd Support- 2761

3^rd Resistance- 2953 3^rd Support- 2697

Conclusion: Spinning top candle formation on weekly charts indicates to be low volatility and indecisiveness market, next week. Major support of Nepse is at 2750.

Weekly Market Summary of NEPSE:

More than 5.58 crore unit shares worth Rs 23.26 Arba have been traded through 2.57 lakh transactions this week. The current market capitalization of NEPSE stands at Rs. 3,929,861.44 Million.

NEPSE index and Sub-indices performance: (Decrement here is based on the previous week closed value)

The NEPSE index closed at 2825 points this week losing 0.63% of the value compared to last week. Manufacturing and Processing gained the most this week with an increment of 2.70%.

Stock with the highest monthly Beta value from the Development Bank and Finance sector

Best Finance Limited (BFC) has the highest monthly Beta value of 3.73 followed by Joshi Hydropower Development Company Limited (JOSHI) and Guheswori Merchant Banking & Finance Limited (GMFIL) with 3.72 and 3.46 beta values respectively.