Turnover Declining, Index Falling; Technical Analysis with Sector Comparison and Major Highlights of the Week

Fri, Jun 25, 2021 2:21 PM on Stock Market, Weekly Analysis,

-ShareSansar

This week Nepse Index made a 153.23 point volatility with the market reaching the highest 2978.26 and the lowest 2825.03. On Tuesday the index made a low of 2825.03. The index lost 125.43 points (4.23%) in this trading week. Last week market closed at 2968.43 points and this week closed at 2843 points on Thursday.

Candlestick pattern:

This week-long bearish candle has formed on a weekly chart. Last week, a shooting star candle was formed. A shooting star indicates a potential price top and reversal. A shooting star pattern is valid until Nepse closes above 3063.06.

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 signals 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 47.59 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- 2991

1^st Resistance- 2939 1^st Support- 2786

2^nd Resistance- 3035 2^nd Support- 2729

3^rd Resistance- 3111 3^rd Support- 2652

Conclusion: All major indicators are supporting a downtrend. Buying opportunity will be created only after the Index closing above the high of a shooting star. Major support of Nepse is at 2750.

Weekly Market Summary of NEPSE:

More than 10.22 crore unit shares worth Rs 49.12 Arba have been traded through 5.38 lakh transactions this week. The current market capitalization of NEPSE stands at Rs. 3,949,619.20 Million.

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

The NEPSE index declined by 4.23% this week. All of the sectors lost this week.

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

Gurkhas Finance Limited (GUFL) has the highest monthly Beta value of 1.41 followed by Nepal Insurance Company Limited (NICL) and Ngadi Power Company Limited (NGPL) with 0.99 and 0.87 beta value respectively.