NEPSE is finally out of red and trading in green. After hitting a high of 772.88 on Mar-02-08, NEPSE started its downhill journey. It was stopped yesterday after it crossed the previous closing of 712.97 and hit 720.92 much to the delight of the bullish investors. We @ ResCon had tagged Monday (Mar-18) as the important date and had predicted the NEPSE to recover from the current mid-week. NEPSE expectedly took a breather and moved towards the delight zone. So, how as a trader and an analyst, can you exactly predict NEPSE’s movement? Here is what you need to do:
There is one thing which you should always keep in mind. Please note: We hear a lot about Nepalese Security Market not following fundamentals and technical theories. Yes we agree that fundamentally the NEPSE’s movement is not supported but technically, we simply can’t say charts do not have future in them. For a moment, forget about the market hypothesis and concentrate on the charts of NEPSE. May be just may be, you may see the glimmer of light guiding you the road ahead. Well, here @ ResCon, we cashed on that light to better place our investors:
Support and Downtrend:
NEPSE, in the past week, was looking for a support level and finally it found one. The support level of 708-712 was what we had in our pocket. Thus on March-17, NEPSE found a support level and started its uphill drive. The downtrend, as shown below, also suffices this move.
How long is the Bull run going to continue?
To find out how the NEPSE will be panning in the weeks ahead, following metrics can be very useful.
NEPSE as of Mar-17-08: 720.92
Short-term Moving Average (SMA):855.89
Mid-term Moving Average (MMA): 783.42
Long-term Moving Average (LMA): 595.45
Interpretation:
- NEPSE has closed below its SMA
- SMA is currently above mid-term & above long term moving averages.
Thus, NEPSE is neutral in short-term and bullish in mid-long term. Hence, it is better to stay long in this situation. We will definitely see another rally across NEPSE toward the 1000 in this mid-long term run of NEPSE.
P.S.
Next week we will analyze the charts using Bollinger Bands and RSI. Our focus here is to provide our readers a set of technical tools that will effectively help them BETTER INTERPRET THE NUMBERS and earn maximum profit out of it. We are bullish on that and on the market as well.
