Commercial Banking Index Signals Trend Reversal: Analysts Eye Targets at 1456, 1603, and 1740

Kathmandu, Feb 4, 2025 – The Commercial Banking Index is showing strong early signals of a bullish reversal, following a prolonged downtrend that lasted several months. The latest technical analysis suggests that the index has broken out from a descending channel, signaling potential upside movement in the coming weeks.

Market analysts are closely monitoring the price action, which indicates a shift in sentiment from bearish to bullish after forming a Break of Structure (BOS). This shift could mark the beginning of a new upward trend, provided key resistance levels are breached.

Market Structure Breakdown

Over the past few months, the index followed a Lower High (LH) and Lower Low (LL) pattern, reinforcing a bearish trend. However, recent price movements suggest a possible reversal with the following key observations:

Change of Character (ChoCH): This pattern, marked on the chart, indicates that sellers are losing dominance, and buyers are gradually stepping in.
Break of Structure (BOS): The index has broken a crucial resistance level, signaling a potential trend change.
Volume Surge: A significant rise in trading volume (689.453M) suggests increasing investor interest.

As a result, the index has rebounded from a strong support zone, located between 1320–1350, a level that previously acted as a demand area.

Key Resistance Levels and Price Targets

With the recent breakout, analysts have identified three major resistance levels where price action could face challenges:

Target 1 – 1456: This level represents the first resistance zone, where sellers may attempt to push the price down. If the index sustains momentum above this level, it could confirm the reversal trend.
Target 2 – 1603: A strong supply zone, previously acting as a major resistance, could be the next upside target. A successful breakout here would signal further bullish strength.
Target 3 – 1740: The final upside target, where the index could potentially test previous lower highs. If bullish momentum continues, this price level could act as the final resistance before a new trend confirmation.

Technical Indicators Supporting Bullish Momentum

Several technical factors suggest that the index is entering a potential uptrend:

✅ Support Confirmation: The index successfully bounced off the 1320–1350 demand zone, preventing further decline.
✅ Bullish Trend Channel: The index is now trading within a newly formed ascending channel, indicating higher highs and higher lows.
✅ Volume Confirmation: Increasing trading volume supports the price move, confirming strong buyer interest at lower levels.

However, traders should watch for consolidation around key resistance levels before confirming the trend.