NEPSE Market Update: Technical Analysis and Trading Insights

On the second trading day of the week, the NEPSE index closed with a modest gain. After a slight decline on Sunday, the index saw an increase of 9.78 points on Monday, reaching 2550.36. Similarly, the Sensitive Index rose by 1.43 points, while the Float Index increased by 0.71 points. The Sensitive Float Index also grew by 0.47 points.

Along with the increase in the NEPSE index, trading volume also saw a slight rise. On Sunday, the market recorded a trading value of NPR 3.89 billion, while on Monday, this value increased to NPR 3.94 billion, with 88,93,000 shares traded in 61,635 transactions. Four stocks hit the positive circuit level, including Bandipur Cable Car & Tourism, Sagar Distillery, Bungal Hydro, and Jhapa Energy. Additionally, the share prices of Green Development Bank and Joshi Hydropower increased by approximately 9% and 8%, respectively, while the share price of Geography Energy Development Company dropped by 9.99%.

Based on trading volume, Sahas Urja topped the list with NPR 18.36 million in traded shares, followed by NRN Infrastructure & Development with over NPR 16.5 million, and Shivam Cements, which saw more than NPR 16 million in transactions. Out of the 13 subgroups, 11 saw an increase in their index, while 2 experienced a decline. The Development Bank subgroup saw the highest increase of 1.50%, while the Hotels and Tourism subgroup rose by more than 1%. On the other hand, the Life Insurance and Other subgroups showed a slight decrease in their indices.

Technical Analysis:

Today, the NEPSE market showed an important technical signal. Over the past 12 candles, the market has failed to make higher highs (HH), with today's candle closing at the same level as yesterday's high. This indicates that the market is attempting to stay in a sideways trend after a downtrend. This could suggest the market is entering an accumulation phase, but the turnover still lacks the necessary support for a sustained move.

The current candle can be seen as a positive "bullish sentiment" candle, particularly as it forms a "spinning top" pattern in the sideways and downtrend phase. The fact that it is green adds a technical positive aspect, but for the market to confirm higher highs, more effort will be needed.

According to analyst Ajit Khanal, the market is currently below the middle band, and the RSI is still below the neutral zone. In terms of trading activity, there was a slight increase in the trading volume during the green candle formation, but the market opened in a slow and sluggish manner with no significant up or down movements. The highest point of the day was 2555, which remained the day’s peak, but after that, there was no significant momentum. However, in the final 10 minutes of trading, the volume increased, and the trading share of Hydro stocks dropped below 50%. The production and investment sectors saw a slight increase in trading share.

Looking at the trading activities of the top 10 brokers, six out of them had bought more than they sold, signaling a potentially positive sentiment for the market.