Technical Analysis 1. Market Summary (as of Oct 17, 2014)

Nepse at close last week (Oct 16, 2014) 923.59

Nepse high last week (Oct 16, 2014) 923.59

Weekly Change 1.71 (or 0.19 %)

Daily Volume (Avg.) NPR 21.18 crores

Total Traded Amount (weekly) NPR 1.06 billion

Immediate Resistance 972.17

Immediate Support 917.58

RSI 48.52

MACD Line - 8.30

Signal Line - 12.77

2. Market Trend

Nepse (Jan 01, 2014 – Oct 16, 2014) Nepse began this week on the losing trend as the market fell during the first two trading days. However, this trend reversed as Nepse closed the week on a positive note. By the last trading day, Nepse inched up by 1.71 points (or 0.19%) to close at 923.59 points. Over the last few weeks, the secondary market has been trending sideways as there has been no concrete direction in recent times. This week, the daily average volume reached NPR 21.18 crores which is a significant improvement from the previous week that only saw NPR 10.10 crores of trading each day on average. The increase in volume can also be partly attributed to the postponement of full CDS operations to April 15, 2015. The non-requirement for investors to open demat account for stock

purchases on blank transfer also helped increase market participation. The stabilizing trend in Nepse may continue until there is a noticeable change in market volume.

3. 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 fell during the early part of the week but climbed back up to close at 48.52 levels. With the market trending sideways, it is natural to see the RSI hovering in the neutral zone.

RSI (Dec 01, 2013 – Oct 16, 2014)

4. 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. Though Nepse has been trading within a specific range in recent times, the MACD and Signal lines have been gradually inching towards the zero line. At present, the MACD and Signal lines stand at - 8.30 and - 12.77 points respectively.

MACD (Dec 01, 2013 – Oct 16, 2014)

5. 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 Bollinger Bands show Nepse decline and touch the mid-band followed by a small increase. The gap between the upper and lower bands has also narrowed in recent times indicating decreasing volatility in the market.

Bollinger Bands (Dec 01, 2013 – Oct 16, 2014)

Overview: Nepse traded almost flat this week as the secondary market added mere 1.71 points (or 0.19%) to close the trading week at 923.59 points. The overall market volume showed signs of improvement this week as the total market turnover reached NPR 1.06 billion. The daily average volume increased to NPR 21.18 crores, which is more than double when compared to the week before. Among the indicators, the RSI increased slightly to 48.52, which shows a stable supply and demand scenario in the market. The MACD and Signal lines both increasing gradually shows a steady momentum in the upward direction. The Nepse line hovering near the mid-band along with converging upper and lower bands suggest low market volatility. Overall, the market may keep trending sideways in the near future if the volume situation does not change.

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Nepse (Jan 01, 2014 – October 16, 2014)

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RSI (Jan 01, 2013 – October 16, 2014)

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MACD (Jan 01, 2013 – October 16, 2014)

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Bollinger Bands (Jan 01, 2013 – October 16, 2014)

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