Weekly Summary: NEPSE Penetrates Below Assumed Support, A Look Into Major Market Movers

Fri, Apr 8, 2022 3:14 PM on Stock Market, Weekly Analysis,

Part 1: Rundown and Technical Analysis

The market operated for the entire 5 trading days this week. The market is closed on Fridays and Saturdays every week.

The NEPSE index closed at 2,464.36 this week after a loss of 79.95 points (-3.14%). The index had closed at 2,544.31 last week with a loss of 2.65% from the week before that.

This week, the index went as high as 2,546.65 and as low as 2,417.08, hence witnessing volatility of 129.57 points. In the previous week, the index had seen a volatility of 125.39 points.

Analysis of Trend

The NEPSE index is down around 7.77% compared to the same date last year. It is down 22.95% from the all-time high of 3,198.60 created around seven months ago. The index is 8.56% below the most recent pivot high.

Candlestick Charting and Volume

On the weekly candlestick chart, this week's market movement has formed a long red candle with a long lower shadow. Last week's candle was a long red candle with comparable shadows on both sides.

The highest intraday loss was 46.46 points on Tuesday while the highest, and the only, intraday gain was 35.7 points on Wednesday.

Volume was the highest on Tuesday when the index lost 46.46 points.

Momentum Indicators

The relative strength index (RSI) is a momentum indicator used in technical analysis that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or index. Traditional interpretation and usage of the RSI are that values of 70 or above indicate that a security is becoming overbought or overvalued and may be primed for a trend reversal or corrective pullback in price. An RSI reading of 30 or below indicates an oversold or undervalued condition.

The RSI reading on the daily timeframe is 34.94. Meanwhile, the RSI reading on the weekly chart is 40.52. No diversion has been seen in the RSI in relation to the index, thus invalidating any attempt toward the prediction of a reversal. Furthermore, the RSI readings in the daily and weekly charts also say very little other than the obvious fact that the sentiment has been pessimistic in the last few weeks.

On the other side of things, the MACD line is still negative, i.e. below zero in the daily timeframe, with the MACD reading at -55.97. The MACD line is below the signal line.

Price Action

The index gained only on the last trading day on Thursday. However, this does not allow chart-readers to be instantly optimistic about a reversal.

It does look like the index has bounced back from the 0.786 Fibonacci level drawn between the two most-recent significant pivot extremes. Although some technical analysts put too much emphasis on these retracement zones, the analyst at hand prefers to adhere to this quote:

"Anticipating retracement levels can be somewhat hazardous, and the trade-off between the amount of retracement desired and what may actually occur is usually unanticipated. Thus, a rough estimate from previous retracements, support and resistance zones, and the location of the longer trend line is probably the best information for an estimate rather than the mechanical percentage numbers derived from various formulas."

In terms of price action, the index this week did not achieve anything significant besides breaking below the assumed support near the 2,500 index levels. This recently-broken support itself may now act as resistance.

Part 2: Insight into Important Data

More than 2.23 crores unit shares worth Rs 9.83 Arba have been traded through 1.86 lakh transactions this week. The current market capitalization of NEPSE stands at Rs. 3,498,762.31 million.

NEPSE index and Sub-indices performance: (Increment based on previous week's close)

The NEPSE index declined by 3.14% this week. Hotel and Tourism sector gained 1.90%.

Stocks with the highest monthly Beta (Hydropower, Development Bank, Finance)

The top 3 companies with the highest beta are Pokhara Finance Limited (PFL), Narayani Development Bank Limited (NABBC), and  Manjushree Finance Limited (MFIL) with 2.12 and 2.11 and 2.08 beta values respectively.

Top Ten Gainers of the week:  

Nesdo Sambridha Laghubitta Bittiya Sanstha Limited (NESDO) is the top gainer of this week. NESDO closed at Rs. 1700 with Rs. 644.3 (61.03%) increment.

All the analysis is done with the SS Pro Software. To know more about the software, click on the link below


Top Ten Losers of the week:

Naya Sarathi Laghubitta Bittiya Sanstha Limited's (NSLB) price has decreased by 21.59% and its LTP stands at Rs. 1035.

Top Stocks by Turnover, Volume, and Number of Transaction:

Nabil Bank Limited (NABIL) is the top traded company of the week. A total of Rs. 32.60 crores worth of NABIL shares were traded this week.

Top Buyers Brokers of the Week:

Vision Securities Pvt.Ltd (Broker No- 34) was the top buyer broker of this week and it has bought stocks worth Rs 56.30 crores.

Top 10 Bought Companies:

Top Seller Brokers of the Week:

Naasa Securities Co. Ltd (Broker No- 58) was the top seller broker for this week. The brokerage firm has sold stocks worth Rs 47.92 crores.

Top 10 Sold Companies:

All the analysis is done with the SS Pro Software. To know more about the software, click on the link below