The Nepali stock market had been climbing steadily for four straight weeks. But this week, that momentum took a pause. Many are wondering: Is the bull run done?
Out of the 5 trading days this week, the market dropped on 3 of them and only rose on 2. The NEPSE index, which had closed at 2,982.64 points last week, ended this week at 2,922.63 points a drop of 60.01 points.
Even though the index dropped, total trading volume actually increased slightly. Around Rs. 96.89 billion worth of shares were traded this week, compared to Rs. 95.94 billion the week before. But with the fall in index, market capitalization fell too from Rs. 4.977 trillion to Rs. 4.876 trillion. That means investors saw their total wealth shrink by over Rs. 101 billion.
Let’s break down what some key technical indicators are telling us.
Elliott Wave Pattern
This theory explains market movements in waves — five upward waves during growth, followed by three corrective waves when the market pulls back.
According to this, the NEPSE recently completed its third wave around the 3,028-point mark. Now, it’s likely entering the fourth wave, which is a correction. This wave could pull the index down to somewhere between 2,850 and 2,890 points. After that, the fifth wave could push it higher again — possibly hitting new highs in August.
Other Indicators
- Bollinger Bands show that the market is shifting from the upper band (which signals strength) back toward the middle, suggesting reduced momentum.
- MACD still shows a bullish signal, but the histogram is fading, hinting at weakening strength.
- RSI, which measures whether the market is overbought or oversold, has dropped from 80 (overbought) to around 63 — another sign of correction.
Support and Resistance Levels
Here’s where the market might turn or pause based on recent trends:
- Resistance levels (if the market rises):
R1: 3,030
R2: 3,079
R3: 3,166 - Support levels (if the market falls):
S1: 2,895
S2: 2,808
S3: 2,760
This week’s pivot point is around 2,944. NEPSE has closed below it, reinforcing the idea of a short-term downtrend.
Despite the drop, this week’s activity looks more like a natural pause than a sign of a major reversal. The candles and patterns still suggest bullish strength in the longer term, just going through a short-term dip.
In short: the bull might just be taking a breathers not giving up entirely.
The recent drop doesn’t necessarily mean the market is turning bearish. It could be a healthy correction before another move higher. Still, investors should stay cautious and avoid rushing in without understanding the risks.
Disclaimer: This article is not a trading recommendation. The stock market carries risk, and any investment should be based on personal research or advice from a financial expert.
