Monday, May 11, 2015

KOSPI South Korea Daily Chart

Foreign investors are cashing in  on huge parabolic gains in the KOSPI this year sending the index sharply lower. In the last nine days, the KOSPI has fallen about -5%. The chart is not updated for today, Monday, 5/11/15, with the KOSPI gaining +0.3% benefiting from the Chinese rate cut. Korea is a strong trading partner of China.

The red lines show the negative divergence creating the spank down. The index was overbot and sporting a vertical parabolic rising wedge. Price also violated the upper standard deviation band so all these factors indicated trouble ahead. Price may want to seek the lower standard deviation band at 2068 and rising since it is in the neighborhood. The 50-day MA support is 2061 and rising.

The black circle shows a death cross (50-day MA under 200-day MA) forecasting trouble ahead and the KOSPI did travel lower for another two months before bottoming in January. The gold circle shows a golden cross (50 above the 200) forecasting upside joy ahead. Price immediately went parabolic but as usually happens with the golden crosses, price retreats strongly after the cross occurs. In general, however, price would be expected to move sideways with buoyancy for another month or two. The ADX continues to show a positive uptrend remaining in place (pink box). If the ADX drops under 25-ish, the uptrend is over and the KOSPI will be in for longer term trouble. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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