NEPSE Ends Week Lower as Technical Chart Keeps Recovery Unconfirmed

Kathmandu — Nepal’s stock market ended the week under continued pressure, with the benchmark NEPSE index losing 35.45 points, or 1.32 percent, to close at 2,650.09. The weekly decline, combined with a still-fragile technical structure, suggests that investors have yet to see convincing evidence of a sustained market recovery.

The index had ended the previous week at 2,685.54 points. Of the five trading sessions this week, NEPSE declined on four days and advanced on only one, indicating that sellers retained the upper hand for most of the period.

The daily chart also remains cautious. Friday’s session produced a small red candlestick with a relatively long lower shadow. Technically, such a formation suggests that buyers stepped in when prices moved lower, but their response was not strong enough to reverse the broader direction of the market.

The long lower wick is therefore more a sign of resistance to further decline than confirmation of a bullish reversal. For a meaningful recovery signal, the index would need to break above nearby resistance levels and sustain that move with stronger participation.

The broader chart structure remains weak because recent swing highs have continued to form at progressively lower levels. This pattern of “lower highs” normally indicates that upward attempts are being capped before the market can establish a stronger bullish trend.

Descending resistance lines visible on the chart further reinforce that view. Until the index decisively moves above these barriers, the current movement is better interpreted as consolidation within a weak-to-neutral structure rather than the beginning of a confirmed uptrend.

The first major test is around 2,673 points. A sustained move above this level would improve short-term sentiment and could open room for the index to test the next resistance zone near 2,754 points.

However, merely touching or briefly crossing 2,673 would not be sufficient. From a technical perspective, the breakout would be more credible if the index remained above the level for multiple sessions and was supported by stronger turnover.

On the downside, 2,602 points has emerged as the most important near-term support. If buyers continue to defend this area, the market could remain within its current trading range and make another attempt toward the resistance zone.

A decisive break below 2,602, however, would weaken the chart considerably. In that case, the next technical support appears around 2,547 points, raising the possibility of renewed selling pressure.

Trading activity offered another mixed signal during the week.

Average daily turnover slipped to Rs 4.29 billion from Rs 4.33 billion in the previous week, a decline of 1.05 percent. At the same time, the average number of shares traded increased by 5.69 percent and the average number of transactions rose by 7.42 percent.

The combination is noteworthy. More shares and more individual transactions changed hands even as the total value of trading declined. This may indicate increased activity in lower-priced stocks or a greater number of relatively small trades rather than stronger institutional or high-value buying.

That distinction matters for the technical outlook. A sustainable market advance normally becomes more convincing when rising prices are accompanied by expanding turnover. This week, the increase in transaction activity did not translate into higher trading value, suggesting that buying conviction remained limited.

Weakness was also widespread across sectors.

Of the 13 sectoral indices, 11 closed lower during the week and only two registered gains. The hydropower sub-index advanced 0.38 percent, rising 14 points from 3,715.96 to 3,729.96. The trading sub-index gained 0.25 percent.

Manufacturing and processing was the weakest sector, falling 2.49 percent. The sub-index dropped 265.43 points from 10,659.55 to 10,394.12.

The fact that 11 of the 13 sectors declined shows that the correction was not confined to a small number of heavyweight stocks. Instead, selling pressure was relatively broad-based, which adds weight to the cautious interpretation of the overall index.

The decline was also reflected in market capitalisation. Total market value fell by around Rs 60 billion during the week, from Rs 4.615 trillion at the end of the previous week to approximately Rs 4.554 trillion.

Despite the broader weakness, individual stocks continued to record sharp movements.

Everest Colour emerged as the strongest performer of the week, climbing 27.17 percent. Its share price rose from Rs 1,309.30 in the previous week to Rs 1,665. Solu Hydropower also gained more than 17.5 percent.

At the other end, Reliance Spinning Mills recorded the steepest weekly decline among the highlighted stocks, losing 12.64 percent. Samudayik Laghubitta Bittiya Sanstha fell by more than 9.5 percent.

Floorsheet activity also showed selective buying and selling interest. Taragaon Regency Hotel, Upper Solu Hydro Electric Company and Multipurpose Finance were among the stocks appearing prominently on the popular-buy side, while Laxmi Laghubitta Bittiya Sanstha, Modi Energy and Maya Khola Hydropower featured among the more actively sold stocks.

A substantial volume of new securities was also listed on NEPSE during the week, including bonus shares of Nepal Life Insurance and units of Siddhartha Equity Fund-2, Sanima Equity Fund-2, LS Horizon-12 and Reliable Samriddhi Yojana-2.

Taken together, the weekly data and technical chart point to a market that is not in a confirmed bullish phase but is also approaching an important decision zone.

The 2,602–2,673 range is likely to be crucial in the coming sessions. A sustained move above 2,673 could be the first meaningful indication that downward pressure is easing, with 2,754 becoming the next technical target.

Conversely, a break below 2,602 would shift the balance more clearly in favour of sellers and could expose the index to the 2,547 support area.

For now, the technical picture remains neutral to mildly bearish. Lower highs, weak breadth and the absence of a turnover-backed breakout suggest that investors may need stronger evidence before treating any short-term rise as the beginning of a durable recovery.