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Thursday, June 25, 2009

Watch Korea Kospi - Region's Leading Indicator!

Daryl Guppy wrote an analysis on Kospi yesterday. Key points to not:

  1. The KOSPI is the leading index in the region. It leads the way for other regional developments.
  2. The KOSPI has been in a sideways pattern for several weeks. This loss of momentum has been reflected in other regional indexes.
  3. The key feature is the decline in momentum as the index reaches the breakout target near 1400 and 1450.
  4. The behaviour of consolidation will provide leading indications of the behaviour of other regional markets.
  5. A break below the consolidation has a target near 1250. An upside move above the consolidation area has a target near 1650 to 1700.
  6. At this stage of development there is no indication of how the KOSPI will move.
  7. A successful consolidation and continuation will set upside targets near 1700.
  8. A failure of support at 1450 sets downside targets near 1250. A retreat to this level remains bullish.
  9. A substantial pullback and rebound is required before this can be defined as a sustainable trend breakout rather than a momentum rally.
  10. Until this develops, this rally is treated as a momentum rally and traders must be alert for a decline in momentum and a retreat.

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