NEPSE
NEPSE Indicates Bullish Divergence, Market Could See Reversal
The Nepal Stock Exchange (NEPSE) closed at 2,726.33 points on Wednesday, down by 15.64 points (-0.57%) with a total turnover of NPR 4.72 billion. Despite the decline, technical indicators show signs of a potential reversal as the Relative Strength Index (RSI 14) stands at 39.53, forming a higher low, while the NEPSE index itself has been making lower lows. This pattern indicates a bullish divergence, suggesting that selling pressure is weakening and a short-term rally could be on the horizon. Analysts highlight that sustaining above the 2,700-point level and an RSI move above 50 would confirm the bullish momentum, while a breakdown below 2,680 points may delay recovery. Overall, the divergence has brought cautious optimism among investors, signaling possible market upside in the coming sessions.
Sandeep Chaudhary
1 min read
Kathmandu, September 3, 2025 (Bhadra 18, 2082):
The Nepal Stock Exchange (NEPSE) index closed at 2,726.33 points, down by 15.64 points (-0.57%) today, with a total turnover of NPR 4.72 billion. Despite the decline in the benchmark index, technical indicators suggest that the market may be nearing a potential reversal phase.
One of the most significant signals is the bullish divergence observed on the Relative Strength Index (RSI – 14). Currently, RSI stands at 39.53, slightly above the oversold zone, and is forming a higher low. In contrast, the NEPSE index has been forming lower lows in recent trading sessions.
This divergence pattern is widely considered a bullish signal in technical analysis. It typically occurs when momentum indicators, like RSI, move in the opposite direction of price trends — implying that downward selling pressure is weakening, and buyers could soon regain control.
Market analysts suggest that this setup indicates potential accumulation at lower levels, signaling that institutional and retail investors may be positioning ahead of a rebound. Historically, such bullish divergences in NEPSE have often preceded short- to medium-term rallies.
However, analysts also caution that confirmation is crucial. If NEPSE sustains above the 2,700-point support zone and RSI continues to climb above 50, it could validate the bullish reversal. Conversely, a breakdown below 2,680 pointsmight delay the recovery and extend consolidation.
Investor sentiment remains cautious amid recent volatility, but the bullish divergence has injected a degree of optimism in the market. Traders and investors are closely watching for confirmation in the coming sessions.
Key Highlights:
NEPSE closes at 2,726.33 points (-0.57%).
RSI (14) at 39.53 shows higher low, while index makes lower low.
Clear sign of bullish divergence, indicating possible trend reversal.
Support at 2,700 points crucial for confirming upside momentum.
If sustained, this divergence could mark the beginning of a short-term bullish rally, offering opportunities for swing traders and medium-term investors.
Written by
Sandeep Chaudhary