Bullish Signal Strengthens: NEPSE Closes Above 200-Day Moving Average Amid Rising Momentum

NEPSE and Market Outlook
On Wednesday, the NEPSE index rose by 34.42 points to close at 2,694.82, marking its fourth consecutive day of gains. This continued upward movement is signaling renewed optimism in the stock market, which had remained sluggish in recent weeks. Analysts believe that after a correction phase that drove prices lower, both investors and technical traders are re-entering the market at attractive valuations.

Additionally, abundant liquidity in the banking system and historically low interest rates are prompting more investors to take advantage of margin loans and credit-based investments. As the end of the fiscal year approaches, listed companies are preparing to publish their fourth-quarter financial reports, and many are expected to announce dividends shortly thereafter. This anticipation has led many short-term investors to re-enter the market to capture quick gains.

Surge in Trading Volume
On Wednesday, a total of 317 stocks were traded across 89,468 transactions, with 30.18 million shares changing hands. Total turnover surged to NPR 9.74 billion, up by nearly NPR 2.7 billion compared to the previous day—indicating growing investor confidence and participation.

Two stocks, Green Development Bank and Khanikhola Hydropower, hit their upper circuit limits for the day. Meanwhile, Nepal Insurance surged by nearly 10%, and Guras Laghubitta gained over 9%. In contrast, ICFC Finance Debentures declined by about 3.73%.

Top Stocks by Turnover
NRN Infrastructure & Development topped the trading chart with NPR 555 million worth of transactions. It was followed by Sahas Urja (NPR 495 million) and Saptakoshi Development Bank (NPR 350 million). Notably, all 13 sectoral sub-indices ended in the green, with Life Insurance posting the biggest gain at 2.83%. Development Banks and Non-Life Insurance also rose more than 2%, while Banking, Finance, Investment, and Trading sectors gained over 1%.

Technical Analysis: NEPSE Breaks Above 200-Day MA

From a technical perspective, NEPSE has broken above the 200-day moving average (MA)—a significant bullish signal often interpreted as a long-term trend reversal. After analyzing the last 24 candles (daily candles), it’s evident that the index decisively closed above this level. The Relative Strength Index (RSI) is also above 63, reinforcing bullish sentiment without indicating an overbought zone yet.

This momentum, paired with increasing volume and sectoral diversification, suggests that NEPSE may form a new higher high (HH) structure in the coming days. Wednesday’s turnover was the highest in the last 10 trading sessions, further confirming bullish momentum.

Sector Rotation Confirmed
A significant shift was observed in sectoral dominance: hydropower, which consistently contributed over 50% of daily turnover for months, saw its share fall below 50% for the first time. Simultaneously, trading volume in insurance, microfinance, development banks, and investment companies increased, confirming the start of a sector rotation. This reflects a broadening of market participation, reducing the dependency on hydropower-driven momentum.

Broker Activity Analysis

Among the top 10 brokers, six reported more sell transactions than buys, indicating profit-booking by short-term investors. However, overall buy-side volume remained strong, limiting any negative impact on the index.

Broker No. 58 led the market with total turnover exceeding NPR 1.42 billion, out of which it executed NPR 64 crore in buy orders and NPR 78 crore in sell orders. Similarly:

• Broker No. 49 traded NPR 880 million (Buy: 510M | Sell: 370M)

• Broker No. 34 (Buy: 370M | Sell: 400M)

• Broker No. 42 (Buy: 310M | Sell: 330M)

Major Stocks Movement

• NRN Infrastructure saw heavy activity through Broker No. 58: 99,000 shares bought and 123,000 sold, contributing to nearly 50% of the day’s total sell volume in the stock.

• Laxmi Sunrise Bank recorded 66,000 shares bought via Broker No. 36.

• Khanikhola Hydropower saw 63,000 shares bought through Broker No. 64.

• Chilime Hydropower registered 56,000 shares bought via Broker No. 65.

• On the sell side, Broker No. 41 sold 137,000 shares of Saptakoshi Development Bank, accounting for 43% of the stock's daily sell volume.

With NEPSE now trading above its 200-day moving average, increasing turnover, strong RSI, and signs of sector rotation, the market appears to be entering a bullish phase. Dividend season, low interest rates, and rising investor sentiment further support the case for continued market momentum. However, cautious and well-informed investment decisions are still advised.