NEPSE Rises for Sixth Consecutive Day, Doji Candle Near Strong Resistance Signals Market Uncertainty

The Nepal Stock Exchange (NEPSE) continued its upward momentum for the sixth straight trading day, closing at 2,706.36 points on Sunday with a modest gain of 2.40 points. Since Asar 15, the index has surged by 110 points.

This continued rise is largely attributed to investor optimism regarding the upcoming monetary policy. Nepal Rastra Bank has intensified its discussions for policy formulation, fueling expectations of market-friendly provisions.

However, a Doji candle formed at the close of Sunday’s session—near a strong resistance level—signals indecision in the market. Despite testing the previous high, NEPSE couldn’t break above it, indicating potential selling pressure ahead, according to technical analysts.

The hydropower sector witnessed significant profit booking, resulting in a decline in its contribution to overall turnover. Meanwhile, the finance and “Others” sub-indices gained momentum, signaling a shift in investor focus.

Sunday’s total turnover stood at NPR 9.50 billion, slightly down from Thursday’s NPR 9.64 billion. Out of 13 sub-indices, 7 closed in the green while 6 declined. Notably, the "Others" index rose by 3.06%, and the Finance index by 2.49%.

Nepal Finance hit the positive circuit limit, while Guardian Micro Life Insurance surged over 7%. On the downside, Green Development Bank fell by 8.58%, and the price of the 12% Goodwill Finance Debenture dropped by 8.87%.

Nepal Reinsurance Company led the trading volume with NPR 494 million in turnover, followed by Laxmi Sunrise Bank’s promoter shares at NPR 378 million, and Himalayan Reinsurance at NPR 342 million.

Technical Analysis:
NEPSE is currently hovering near a strong resistance level, and the formation of a Doji candle implies market indecision. The failure to break above key levels and a slight dip in turnover suggests buyer-seller tension. Analysts also point to potential “fiscal year-end effects” influencing investor behavior.

Broker Activity:
Analysis of top 10 brokerage firms shows most executed more sales than purchases, indicating rising caution among investors. Broker No. 55 saw significant action, with 206,000 units bought and 138,000 units sold.

Despite favorable liquidity, low interest rates, and policy optimism, the market is technically uncertain at this point. A confirmed breakout above the current resistance is needed for a strong bullish move. Until then, cautious optimism prevails among investors.