NEPSE Technical Analysis Basics: Candlesticks, RSI & MACD

NEPSE technical analysis is the study of price and volume on charts to decide when to enter and exit a trade. While fundamental analysis tells you which company to own and why, technical analysis helps you time the trade and manage risk. Used together — and never without strict risk control — they make you a more disciplined, consistent trader.

This guide covers the building blocks I teach beginners: candlesticks, support and resistance, RSI, MACD and volume.

What is technical analysis?

Technical analysis assumes that all known information is already reflected in the price, that prices move in trends, and that history tends to rhyme. So instead of reading financial statements, you read the chart — the collective behaviour of every buyer and seller.

It is a probability game, not a crystal ball. The goal is to find setups where the odds favour you, then size positions so you survive the trades that go wrong.

How do you read candlestick patterns?

Each candle shows the open, high, low and close for a period. The body and wicks reveal who won the session — buyers or sellers. A few high-value patterns:

• Doji — open and close nearly equal; indecision, a possible turning point.
• Hammer — long lower wick after a downtrend; potential bullish reversal.
• Engulfing — a large candle that swallows the previous one; momentum shift.

Patterns are far more reliable at key levels than in the middle of nowhere — which is why support and resistance come first.

What are support and resistance?

Support is a price level where buying tends to halt a fall; resistance is where selling tends to cap a rise. They are the most important concept in charting:

• Traders buy near support and sell near resistance.
• When resistance breaks, it often becomes new support (and vice-versa).
• The more times a level is tested, the more significant it becomes.

What do RSI and MACD tell you?

These two momentum tools confirm what price is doing:

• RSI (Relative Strength Index) runs 0–100. Above 70 is overbought, below 30 is oversold — watch for reversals, but in strong trends these readings can persist.
• MACD (Moving Average Convergence Divergence) compares two moving averages. Crossovers and the histogram help confirm trend direction and momentum shifts.

Use them to confirm a setup, not to trade in isolation.

Why does volume matter?

Volume is conviction. A breakout on high volume is far more trustworthy than one on thin volume, which often fails. On NEPSE, watch volume alongside the floorsheet to gauge whether real demand is driving a move.

Beyond the basics

Once the foundations click, the advanced toolkit includes moving averages, Fibonacci retracements, Elliott Wave Theory and Smart Money Concepts — all of which I cover in depth in my share market classes. You can practise on live charts using NEPSE Trading, which provides TradingView-powered charts for the Nepali market.

The one rule that beats every indicator

No pattern or oscillator works without risk management. Decide your stop-loss before you enter, risk only a small, fixed percentage of capital per trade, and let winners run. Discipline — not prediction — is what separates traders who last from those who don't.

The bottom line

NEPSE technical analysis gives you a structured way to time trades: read candlesticks at support and resistance, confirm with RSI, MACD and volume, and protect every position with a plan. Combine it with fundamental analysis and disciplined risk control, and you trade with an edge instead of emotion.

Want to learn the full system? Get in touch.