KOSPI (SEOUL.NDX)

Short term

Investors have accepted lower prices over time to get out of KOSPI and the index is in a falling trend channel in the short term. This signals increasing pessimism among investors and indicates further decline for KOSPI. The index is approaching support at 2420 points, which may give a positive reaction. However, a break downwards through 2420 points will be a negative signal. The index is assessed as technically slightly negative for the short term.

Recommendation one to six weeks: Weak Negative

Medium term

KOSPI is within an approximate horizontal trend channel in the medium long term. This indicates that investors are uncertain and waiting for signals of further direction. A break upwards will be a positive signal, while a break downwards will be a negative signal. The index gave a negative signal from the head and shoulders formation by the break down through the support at 2500. Further fall to 2211 or lower is signaled. The index has marginally broken up through resistance at points 2430. An established break predicts a further rise. Volume tops and volume bottoms correspond badly with tops and bottoms in the price. This weakens the index and indicates increased chance of a break down. The index is overall assessed as technically slightly negative for the medium long term.

Recommendation one to six months: Weak Negative

Long term

KOSPI is in a rising trend channel in the long term. This signals increasing optimism among investors and indicates continued rise. The price has reacted back after a false break of the rectangle formation. A significant penetration of 2401 will again give new negative signals to the index, while a break of the opposite side of the formation will be a strong positive signal. The index has support at points 2270 and resistance at points 2660. The index is overall assessed as technically neutral for the long term.

Recommendation one to six quarters: Hold