Top pick for the day - South Korea’s KOSPI

The trend remains down


South Korea’s KOSPI (KOSPI) is still trending downwards as prices continued to form lower lows and lower highs since the April high.

Prices are also trading below its 200-day SMA and we expect more selling to take place in the weeks ahead as long as prices remain below 2,101 (in line with our previous call – see 29th June issue).

We see strong support near the 1,940-1,950 levels. Falling below this support band would likely kick start the wave-C that we have been anticipating (see left chart).

Wave-C is likely to take prices to below the wave-A low of 1,644 in the months to come.

A potential target would be the previous fourth wave extreme of 1,532.

Near term, we continue to see more downside for KOSPI with a test of 1,940-1,950 on the cards.

Rebounds, if any, is likely to be weak and should be sold into. The weak Korean Won would likely add selling pressure on the index in the near term. (Read Report)

Source : CIMB Research