Manufacturing Index in a Strong Position: Best Strategy for Trading in a Bullish Market

Kathmandu, February 18 – Nepal Stock Exchange (NEPSE)’s Manufacturing Index has shown strong momentum in recent sessions, signaling a potential buying opportunity for investors. The index closed at 7,039.00, recording a +54 points (+0.77%) gain. During the trading session, the index fluctuated between 7,044 (high) and 6,985 (low), indicating steady upward movement.

The Manufacturing Index has broken out of the trendline and shifted into a bullish structure. The recent confirmation of CHoCH (Change of Character) signals a new upward trend.

Currently, the market has found support around the 7,000-6,950 levels. Buying pressure is visible in the Higher Low (HL) zones. Additionally, the resistance level at 7,100-7,200 is critical; if breached, the index may continue its upward momentum.

📈 Best Strategy for Trading in a Bullish Market

A structured approach in a bullish market helps traders maximize profits while minimizing risks. Below is the most effective trading strategy to follow:

1️⃣ Identify Trend Line Breakout & Confirmation of CHoCH (Change of Character)

✔ Analyze the previous downtrend and identify a trendline breakout.
✔ CHoCH (Change of Character) occurs when the price structure shifts from Lower Highs (LH) and Lower Lows (LL) to Higher Highs (HH) and Higher Lows (HL).
✔ Avoid false breakouts by entering only after confirmation.

2️⃣ Buy at Higher Lows (HL) and Demand Zones

✔ In an uptrend, Higher Lows (HL) form, signaling strong demand and accumulation.
✔ The best buying opportunities arise in demand zones (highlighted in green) or near the lower trendline.
✔ If the price retests the breakout zone, it provides a strong entry opportunity for further upward movement.

3️⃣ Sell at Higher Highs (HH) in Supply Zones

✔ The price forms Higher Highs (HH), indicating profit-taking opportunities.
✔ Sell in the supply zone (highlighted in red) or near the upper trendline, where resistance is expected.
✔ Avoid buying near resistance to prevent getting trapped at high levels.

📌 Trade Setup Using the Manufacturing Index

📌 Buy Zone: 7,000 - 6,950 (HL & Demand Zone Confirmation)
📌 Target (Take Profit - TP): 7,200 - 7,300 (HH & Supply Zone)
📌 Stop Loss (SL): 6,900 (Below Previous HL)

The Manufacturing Index is currently positioned at a Higher Low (HL), making it an ideal buying opportunity. If the price breaks above 7,200 with strong volume, further bullish momentum is expected. However, if resistance holds, traders should secure profits and wait for another HL formation before re-entering.