Weekly Summary of NEPSE With Technical Analysis, Sector Comparison, and Major Highlights

Fri, Apr 22, 2022 4:18 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 2,325.45 this week after a loss of 89.8 points (-3.72%). The index had closed at 2,464.36 last week with a loss of 3.14% from the week before that.

This week, the index went as high as 2,437.42 and as low as 2,287, hence witnessing volatility of 150.42 points. In the previous week, the index had seen a volatility of 129.57 points.

Analysis of Trend

The NEPSE index is down around 11.58% compared to the same date last year. It is down 27.24% from the all-time high of 3,198.60 created around seven months ago.

Candlestick Charting and Volume

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

The highest intraday loss was 41.48 points on Monday while the highest intraday gain was 13.38 points on Tuesday.

Volume was the highest on Thursday when the index gained 4.93 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 28.89. Meanwhile, the RSI reading on the weekly chart is 35.61. Previously, the RSI seemed to be rising at a time when the index was falling. This led some chart analysts to anticipate that a reversal might be ensuing. But the index kept losing thereafter, and the RSI decline eventually followed, hence invalidating that hypothesis.

Furthermore, the RSI readings themselves 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 -77.81. The MACD line is below the signal line.

Price Action

A dragonfly Doji candlestick pattern formed on the daily candlestick chart in NEPSE on Thursday. A dragonfly Doji is where the price (or index) opens at a point, makes a high very near the open, then drops sharply but closes back near the open nonetheless. This signals that although the bears were pessimistic and went on panic selling, the supply was eventually absorbed.

However, it isn't always certain that the supply-absorbers are strong enough to cause a reversal. This is why it is important to wait for a confirmation candle on the day after (Coming Sunday). A green candle indicating the entry of optimistic bulls on the next day is a great validator.

On top of it all, the index seems to have faced support at the previous significant pivot low and bounced back from there. This may be an indication that the support at that level is strong, and the price may fail to break below it. Nonetheless, further index movement is integral to deducing a conclusion of any sort.

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 3.72% this week. All the sectors lost this week.

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

The top 3 companies with the highest beta are Himalayan Power Partner Limited (HPPL), Himalayan Urja Bikas Company Limited (HURJA), and  Samling Power Company Limited (SPC) with 2.57 and 2.32 and 2.31 beta values respectively.

Top Ten Gainers of the week:  

Jalpa Samudayik Laghubitta Bittiya Sanstha Limited (JALPA) is the top gainer this week. JALPA closed at Rs. 709.70 with Rs. 188.6 (36.19%) 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:

Himalayan Urja Bikas Company Limited's (HURJA) price has decreased by 20.99% and its LTP stands at Rs. 320.

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

Nesdo Sambridha Laghubitta Bittiya Sanstha Limited (NESDO) is the top traded company of the week. A total of Rs. 26.43 crores worth of NESDO shares were traded this week.

Top Buyers Brokers of the Week:

Naasa Securities Co.Ltd (Broker No- 58) was the top buyer broker this week and it has bought stocks worth Rs 38.58 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 46.33 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