Where Will NEPSE Head Today? 2590 Support Zone Becomes Crucial as Investor Confidence Remains Weak

Kathmandu. Nepal’s stock market remains under pressure after declining for three consecutive trading sessions. Following Tuesday’s fall of 19.34 points, the NEPSE index closed at 2,622.48 points, making the 2,600–2,590 support zone the key area to watch in Wednesday’s trading session.

The market has entered a technically sensitive phase after breaking below the important 61.8% Fibonacci retracement level on Tuesday. The formation of a lower low structure indicates that the short-term trend remains weak and selling pressure is still dominating the market.

2,590 Support Level to Decide Market Direction

From a technical perspective, Wednesday’s market movement around the 2,620 level will be important. If NEPSE manages to hold this zone and recover, the market may attempt a short-term rebound.

However, if selling pressure continues and the index falls below the 2,600 level, the next major support area will be around 2,590 points. A successful defense of this level could create a possibility of technical recovery, while a strong breakdown below this zone may increase the risk of further correction.

Technical Indicators Still Show Weakness

The Relative Strength Index (RSI) has declined toward the 37 zone, indicating that the market has entered a relatively weak area. Although the RSI suggests that selling pressure has increased, it has not yet provided a clear signal of a strong reversal.

Similarly, the ADX indicator suggests that the current trend is gaining strength. Since the prevailing trend remains negative, a sustainable recovery will require not only price improvement but also stronger buying volume and market participation.

Tuesday’s trading pattern also reflected seller dominance. Although the market opened with a slight gap-up, the initial gains disappeared within the first few minutes. NEPSE filled the opening gap quickly and moved downward, testing the day’s low near the closing period. This indicates that sellers remained active throughout the session.

Large Investors Show Some Accumulation Signs

Despite the overall weak market sentiment, some positive signals have emerged from broker activity. Among the top 10 brokers, seven recorded positive net buying positions on Tuesday.

This suggests that some large investors may be accumulating shares at lower levels. If institutional and high-volume investors continue buying, it could provide support to the market and limit further downside.

However, continuous buying confirmation with higher turnover will be necessary before concluding that a strong recovery has started.

Fundamentals Remain Supportive but Confidence Is Missing

Although the technical picture remains weak, Nepal’s stock market fundamentals are not entirely negative.

Declining interest rates, excess liquidity in the banking system, and improving financial performance of sectors such as banking, hydropower, and manufacturing companies provide a supportive environment for the medium-term outlook.

The Nepal Securities Board has also been introducing market reform measures, including margin trading facilities, preparations for intraday trading, short selling, SME platforms, green bonds, and other financial instruments.

However, these reforms have not yet produced a visible impact on investor sentiment. The current challenge appears to be less about the lack of investment opportunities and more about the lack of confidence among investors.

Key Levels to Watch Today

For Wednesday’s trading session:

• Immediate resistance: 2,620–2,640 zone

• Major support: 2,600–2,590 zone

• Critical level: 2,590 points

If NEPSE moves above the 2,640 zone with improving turnover, it could signal a short-term recovery attempt.

On the other hand, if the index breaks below 2,590 with strong selling volume, the market may enter another correction phase.

Market Outlook

Overall, NEPSE remains in a weak technical phase, but the index is approaching an important support area where buyers may become active.

The direction of today’s market will largely depend on:

• The first one-hour trading movement,

• Market reaction around the 2,600–2,590 support zone,

• Trading volume,

• Institutional buying activity.

Rather than focusing only on whether NEPSE rises or falls today, the key question is whether the market can successfully defend the 2,590–2,600 support zone.

If this level holds, a technical rebound remains possible. If it fails, further weakness cannot be ruled out.