Profit Booking Pressure: NEPSE Fails to Hold 3000 | 80-Point Drop in 2 Days | Consecutive One-Candle Sell!

At the start of the week, NEPSE crossed its highest point in almost four years. However, in the last two trading days, the index has sharply declined, dropping below the psychological resistance level of 3000. After reaching 3002 on Tuesday, the market fell by 48 points on Wednesday and 31.50 points on Thursday, totaling a nearly 80-point decline. By Thursday, the index settled at 2922.63.

According to analysts, this drop is mainly due to short-term investors engaging in profit booking. Additionally, technical analysts have identified the 3000 level as a key resistance zone, which has created psychological pressure among investors, increasing selling pressure in the market.

Experts believe that NEPSE may still cross the 3000 mark within the month of Shrawan, but it might require some time for correction and consolidation. The current pressure is expected to support long-term sustainable growth if the market stabilizes.

On Wednesday, the total market turnover stood at NPR 16.44 billion, which declined to NPR 15.98 billion on Thursday. This indicates both a drop in the index and reduced liquidity and volume.

Sub-Index & Sector Performance

On Thursday, all sectoral indices except the finance sub-index declined. The finance sub-index rose by 1.18%, while the trade sub-index recorded the sharpest fall of 2.44%. Similarly, banking, hydropower, investment, life insurance, and manufacturing & processing sub-indices all dropped by more than 1%.

In Thursday’s trading session, shares of Trade Tower and Nepal Finance hit the positive circuit level. Likewise, shares of Corporate Development Bank, Green Development Bank, and Saptakoshi Development Bank surged by around 10%.

On the downside, the biggest loser of the day was Bhugol Energy Development Company, which plunged by 7.10%.

Top Turnover Stocks

In terms of turnover, Himalayan Re-Insurance topped the list, with shares worth NPR 1.33 billion traded. Nepal Reinsurance followed with NPR 750 million worth of transactions, and Himalayan Distillery crossed NPR 690 million.

Though it may take some time for the market to regain stability, analysts expect NEPSE to eventually breach the 3000 mark again. Investors are advised to remain cautious and focus on long-term strategies.

Technical Analysis

According to technical analysts, NEPSE is currently facing resistance between 3000 and 3050. If the market successfully breaks this zone, the next resistance is expected between 3180 and 3230. However, if the index reverses from there, strong support is expected between 2750 and 2800.

Some analysts claim that Wednesday's market showed a classic one-candle sell, and Thursday confirmed this by closing below Wednesday’s close — validating the “one-candle sell” pattern. Many investors now plan to hold and only re-enter the market after a clear “one-candle buy” signal.

Broker Analysis

Out of the top 10 brokers, six engaged in higher sell volumes while four showed comparatively more buying activity.

On Thursday, NRIC shares were actively bought from Broker No. 55 by NRI investors, with 200,000 units purchased — the same day rights shares were announced. Similarly, from Broker No. 33, 166,000 units of MBL were bought, and Broker No. 44 saw 55,000 units of ADBL bought — representing 41% of the day’s total buy volume.