NEPSE Bounces Back: Market Rebounds After 6-Day Fall, ‘Morning Star’ Candle Hints Bullish Reversal

After six consecutive trading sessions of decline, the Nepal Stock Exchange (NEPSE) made a notable recovery on Monday. The benchmark index rose by 19.30 points to close at 2,628.36, signaling a potential trend reversal after holding firm near the key psychological level of 2,600.

Although the total turnover surpassed NPR 7.35 billion, it slightly dropped compared to the previous day. More than 16.2 million shares from 324 companies were traded. Radhi Hydropower topped the turnover chart with transactions worth over NPR 597.6 million, followed by Nepal Reinsurance and Himalayan Reinsurance in second and third positions, respectively.

Five companies hit the positive circuit limit, while one hit the negative circuit. Analysts interpret the market's rebound without breaching the 2,500 level as a sign of underlying investor confidence.

Technical Analysis: Bullish Signals from Double Bottom and Morning Star

From a technical perspective, NEPSE has reached a strong support zone. The index appears to have formed a “Double Bottom” pattern, followed by a “Morning Star” candlestick — a well-known bullish reversal signal. The RSI is hovering around 44, which, although not in oversold territory, still supports the possibility of a bounce.

The long-standing trendline is acting as support, and NEPSE is currently holding above it. If the index maintains this trend, analysts predict it may target the 2,650–2,700 range in the coming days.

Market Outlook: Cautious Optimism Amid Political and Policy Uncertainty

Analysts noted that many large brokers bought more than they sold, indicating that institutional investors may be re-entering the market. If this trend continues, NEPSE could break out of its sideways movement and head upward.

However, the market is still waiting for key developments: the appointment of the new central bank governor, the mid-term monetary policy review, and the announcement of the upcoming fiscal year’s budget. Although there’s talk of consensus to appoint Dr. Bishwo Poudel as governor, the official process remains incomplete.

Since monetary policy has a direct impact on the stock market, investors are closely watching these developments. Analysts also highlight the need to strengthen investor sentiment and provide policy clarity through the budget.

In conclusion, while the market shows early signs of a rebound, sustainable growth will depend on solid policy signals and stable leadership. Technical experts advise cautious entry with small positions until the trend is confirmed in the coming sessions.