NEPSE Rebounds After Volatile Session, Technical Indicators Signal Bullish Momentum

Kathmandu — Nepal’s stock market staged a recovery on Tuesday, closing higher after a day marked by sharp intraday fluctuations. The NEPSE index rose by 13.51 points to settle at 2812.34, reversing the previous session’s decline. Despite the positive close, the market’s behavior throughout the day reflected lingering uncertainty among investors, with sentiment stabilizing only toward the final trading hours as buying pressure intensified.Turnover also showed a marginal improvement, indicating a gradual return of investor participation. Total transactions reached Rs 12.03 billion, up from Rs 11.97 billion in the previous session. A total of 340 stocks were traded through over 106,000 transactions, involving more than 34.8 million shares. The increase in both volume and turnover suggests that market activity is picking up, although confidence remains cautious rather than fully restored.Several stocks witnessed strong demand during the session. Shares of Reliance Spinning Mills, Solu Hydropower, Salapa Bikas Bank, and Hotel Forest Inn hit the positive circuit limit, reflecting speculative and momentum-driven buying. Similarly, Shivashree Hydropower recorded an 8 percent gain. On the downside, declines were relatively mild, with most losing stocks falling by less than 5 percent, indicating that selling pressure was not aggressive.In terms of turnover, Ridi Power Company led the market with transactions worth Rs 563.7 million, followed by Ankhu Khola Hydropower with over Rs 510 million and National Hydropower exceeding Rs 480 million. The dominance of hydropower stocks in turnover rankings highlights continued investor interest in the sector, which remains a key driver of market activity.Sector-wise performance remained mixed. Out of 13 sub-indices, 6 posted gains while 7 declined slightly. The hydropower sector led the gains with a 1.59 percent increase, while banking, development banks, investment, manufacturing, and mutual funds also registered modest growth. The limited downside across other sectors suggests a balanced market rather than a broad-based sell-off.Market analysts attribute the cautious optimism to political and policy uncertainty, as investors await clearer direction from the upcoming government. The absence of definitive economic policies has kept confidence subdued, preventing a stronger rally. At the same time, discussions around the introduction of intraday trading features have generated interest, as such reforms could enhance liquidity and attract more active traders to the market.From a technical perspective, the market structure is showing signs of strengthening. Tuesday’s candlestick formed a bullish pattern with a long lower wick, indicating strong buying support at lower levels. This suggests that buyers are increasingly willing to step in during dips, reinforcing short-term upward momentum. However, the presence of a slight upper wick signals that resistance pressure remains near higher levels.Key structural indicators further support the positive outlook. The formation of a Change of Character (CHoCH) indicates that the previous downtrend has been broken, with the market transitioning into a new upward phase. Additionally, the Break of Structure (BOS) confirms that the index is establishing higher highs, a classic sign of a developing bullish trend.The index appears to have rebounded strongly from the support zone between 2608 and 2650, which now acts as a critical base. As long as NEPSE holds above this level, the broader trend is likely to remain positive. On the upside, the immediate resistance lies around 2911. A decisive breakout above this level could open the path toward the 3000–3050 range, where a stronger rally may unfold.Volume trends also reinforce the bullish case. The recent increase in trading volume alongside rising prices indicates genuine buying interest rather than a weak or speculative bounce. This alignment between price and volume typically strengthens the sustainability of an upward move.Overall, the NEPSE index is currently forming a higher high–higher low structure, signaling a clear shift toward a bullish trend. However, short-term consolidation near resistance levels remains possible. Analysts suggest that while the market outlook has improved, sustained upward momentum will depend on policy clarity, investor confidence, and continued participation in the coming sessions.