NEPSE Update 05 April

Our previous point of view of Head and Shoulder pattern which we were anticipating to trigger NEPSE’s deeper correction to the level of 2100 seems to have invalidated as of close of 31st March (Close above Right Shoulder handle).

Now, the level of 2662 is in play. Let’s see if NEPSE successfully breaches and advances further up ahead or this level acts as a resistance, the market feels that the correction towards the level of 2100 is still due and tests that level out.

Unless the RSI levels and respectively the price levels in the chart are invalidated, are we looking at a divergence? A divergence in price level and the oscillator. (If) this level can be assumed as higher high, the oscillator shows lower high (of course, unless invalidated). This is understood as a Regular Trend Reversal divergence in which price level goes higher high and the oscillator registers lower high and is seen at the end of an uptrend. If not this indicates an end of an uptrend (a minor correction instead), it corroborates the idea of probability of testing a correction to 2100 level.

If this divergence point of view, as mentioned above is invalidated, we should be seeing NEPSE breaking and holding clearly above the 2680 area and pushing up ahead. In which case we would have lost new position opportunities since 31st March ( as we were waiting for further lower levels to enter) till the break and hold of the 2680 level. But won’t be missing new position opportunities beyond the level mentioned.

If this divergence point of view plays out, we would be waiting for new position opportunities at around 2100 levels.

We need to break down and analyze sub-indexes which would help us understand better. That should give us a better picture on which sector stands where as of now the probabilities.

#tradewithramesh #nepalstock #sharemarket #sharebazaar #NEPSE

Please note that due to market volatility, some of the above sight prices may have already been reached and scenarios played out. This post is a part of freelance research and MUST NOT BE taken as an Investment Advice or so forth. Investing money in the capital market without proper knowledge or professional assistance can result in substantial losses. Trade in your own discretion.