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November 2017 Stock Taking

Published on: 2017-11-06 10:56:16     76 times read    0  Comments
Festival Effect 
 
Trend Analysis
The benchmark index gained a modest 24.65 points (or up 1.67%) to close at 1568.35 last month. The index continues to move close to the 200-day moving average, which acts as a support level to the index. Favorable political outlook has triggered a bullish sentiment in the market. Such optimism caused Nepse to jump by 3.07% on 16th October. The average volume turnover decreased significantly to NPR 38.74 crores from NPR 75.43 crores the month prior. Such a decline is a result of the festival season in the country. 
 
Resistance and Support
 
 
The benchmark index fell as low as 1501.89 during the middle of the month. The index remained above the psychological support level of 1500, which shows presence of bullish sentiment in the market. The current support and resistance level stands the same at 1480 and 1586 respectively. As political outlook seems to be positive, Nepse will test the current resistance level in the coming weeks.  
 
Nepse Trend Indicator
a. MACD
The MACD is a momentum oscillator formed by using two different types of moving averages, which provides specific buying or selling signals. When a MACD line crosses above the signal line, it is considered to be a positive sign and indicates a time to buy, and vice-versa. 
 
The MACD and the signal line, at the beginning of last month, stood at -24.72 and -23.25 respectively. In the course of the month, both the MACD and the signal line increased by 16.69 and 7.37 points to close at -8.04 and -15.88 respectively. MACD crossing over the signal line indicates a bullish trigger. The trigger will further be supported when the lines enter the positive territory. 
 
 
b. RSI
RSI is a form of leading indicator that is believed to be most effective during periods of sideways movement. Such indicators may create numerous buy and sell signals that are useful when the market is not clearly trending upwards or downwards. 
 
The RSI, at the beginning of last month, stood at 39.93 level. In the course of the month, it gained 16.57 points to close at 56.50 level. A steady rise in the RSI signifies a decrease in the selling pressure in the market. 
 
 
c. Bollinger Bands
The Bollinger Band is a technical indicator that consists of a moving average (21-day) along with two trading bands above (upper band) and below it (lower band). The bands are an indication of volatility, which are represented by calculating standard deviation. 
 
The benchmark index bounced back up from the lower Bollinger band in the course of last month. Such a rise indicates an increase in the buying pressure in the market. The market volatility remains moderate as the distance between the lower and upper band remain constant.
 
 
Overview
The benchmark index climbed up by 24.65 points (or up 1.67%) to close at 1568.35 last month. The index is hovering between the 200-day and 50-day moving average. With a bullish trigger in the market, the index will likely surpass the 50-day MA in the coming weeks. The MACD indicator also gives a bullish indication as the MACD line has surged above the signal line. The RSI indicator closing at 56.50 level signify a decrease in the selling pressure in the market. The Bollinger bands also show presence of buying pressure in the market as the index hovers close to the upper band. The support and resistance level stands the same at 1480 and 1586 respectively. 

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