Weekly Stock Market Review: NEPSE Shows Stability Amid Consolidation

Kathmandu. The stock market remained largely stable throughout the week. Closing at 2837.78 points last Friday, the market index reached 2838.40 points by the final trading session of this week, marking a marginal decline of only 0.62 points.

On the first trading day of the week, Monday, the NEPSE index fell by 4.18 points to 2833.36. Following a public holiday for the New Year on Tuesday, the market rose by 33.27 points on Wednesday to reach 2866.87.

On Thursday, the market dropped by 33.83 points to 2833.03, but recovered by 5.36 points on the final day to close at 2838.40, reflecting minimal weekly volatility. Throughout the week, the index reached a high of 2879.21 on Wednesday and a low of 2808.02 on Friday.

The final day's trading formed a spinning top or a small doji candle, signaling uncertainty between buyers and sellers and a lack of clear market direction. However, the green color indicates a generally positive sentiment.

NEPSE is currently in a consolidation phase, staying within a specific range. The market appears to have established the 2800 psychological level as a strong base. Technically, it can be understood that the market is accumulating strength before reaching new highs.

Meanwhile, the average trading volume decreased slightly this week. The average turnover fell from 8.87 billion rupees last week to 8.83 billion rupees this week. The highest turnover was recorded on Wednesday at 10.28 billion rupees, while the lowest was 7.39 billion rupees on Friday.

Current volume appears lower compared to previous days, suggesting that significant market volatility is unlikely in the immediate future and that investors remain in a wait-and-see mode.

Technical Analysis

The latest trading data shows the RSI at 53.17. An indicator above 50 suggests that buyers still maintain a slight dominance, which is a favorable condition for the market.

Similarly, the MACD histogram shows shortening red bars, indicating that selling pressure is easing. However, a bullish crossover is still awaited for full market enthusiasm. Both lines remaining above the zero line suggest that the long-term trend remains positive.

The 9-day and 21-day moving averages indicate support in the short term and resistance in the medium term. The 9-day average has established strong support at 2820, reducing the likelihood of an immediate sharp decline. However, the 21-day average is acting as resistance at 2846. The potential crossover between these two lines is expected to determine the market's future direction.

NEPSE is currently in a consolidation phase, staying within a specific range. The market appears to have established the 2800 psychological level as a strong base. Technically, it can be understood that the market is accumulating strength before reaching new highs.

If NEPSE clearly breaks above the 2846 to 2850 range with volume, a new bullish trend is likely to begin, with the potential to reach 2950 and 3000 points.

If the market falls below 2820 with declining volume, it may remain in a sideways trend for some time.