KRX:KOSPI is looking pretty bad. The overall chart looks bearish and the fundamentals are not getting much better. The uptrend stops reaching the red resistance channels which is another bearish indicator.
Sell-Signal: There are multiple reasons why we are going short, once the purple line is crossed and the price is stagnating in the red zone. The red zones are defining strong support and are also part of the recently established green SupertrenD support channel (not visible in the chart). If you look at the total chart, then it will be the first strong signal once 1950 is broken. That's when we will enter a short position on the index. When 1850 breaks, then we lose the last support channel and will head down without support until the support channel which was established 1998 at the end of the Asian crisis.
We can not really tell you a target for now, because the channel will move up over time, but it might be in the 1500 area. We would manually lower our exposure once the price starts to jump back over 1950 and starts to build support.
I've looked again at your chart. I see the possibility that 510 in 2002/3 was the end of a possible triangle. That is then followed by what could be interpreted as a rising wedge abcde to the final peak. If so, this is a very negative chart indeed. As far as I'm aware, after a rising wedge prices typically fall quite quickly back to wave 'b' of the wedge, which in this case is the 2008 low at 875 or so. Of course 'quickly' is relative given that the wedge (if it is such a thing) took 15 years or so to form.
If this indeed the correct interpretation then the outlook for the Korean market is extremely negative on a multi year view. And I imagine that whatever could cause such a decline would also impact the currency.
Thanks for posting this chart - one of the most interesting charts I've seen in years.
FelixKewa
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@kunsan, Thank you for your kind words. I agree with what you were saying. Interesting enough that the corona virus triggered the expectation of the chart. The price bounced from the green zone and now its more a matter of the global economy whats going to happen. Overall I would not go for the worst scenario. As long as central banks are printing money and interest rates are low world wide we should consider that the market will overall continue to go up.
kunsan
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Thanks for this chart. It does indeed look very negative in the long run. Note that approx 30% of Koreas GDP is generated just by the Samsung Group, and 70% of Samsungs profit is semiconductors and Cellphones - both of these are gently declining at the moment.
If this indeed the correct interpretation then the outlook for the Korean market is extremely negative on a multi year view. And I imagine that whatever could cause such a decline would also impact the currency.
Thanks for posting this chart - one of the most interesting charts I've seen in years.