Published on the 31st of October 2017 & validated on the 11th of December 2017

The Kospi index is headed for further gains. We believe that Korean stocks are still at an early stage of a secular bull market. We expect slightly higher prices until year end 2017.

Short Term Kospi Forecast

Published 28th of November 2017 & updated 11th December 2017

Our Kospi forecast is followthrough to the upside. We see seven impulsive waves up at minuette degree since early August 2017. Therefore it does not look likely that some major reversal is active as we publish this. We do need at least another up sequence to count 9 waves in order to correct at a higher degree. Short term wave 1 is in progress.

We see the correction into wave 4^ as almost finished. A 38.2% fibonacci has already been reached in the latest drop. An extension is not necessary and elliott guidelines to a steep wave 2^ project a shallow wave 4^. Next support and resistance for a potential downside expansion of wave 4^ are around the 321 level. Here we find also the 50% fibonacci level of wave 3^ up.

Mid Term Kospi Forecast

Published on the 31st of October 2017 & validated on the 11th of December 2017

The Kospi has finished a cycle degree IV wave correction in 2003. Thereafter it has traced out an impulsive primary wave cycle that was corrected in the financial crisis. Subsequently the Kospi was among the early markets of developed economies to reach a new all-time high in intermediate wave (1).

The following sideways correction took a few years. The current conclusion of our technical analysis is that the Kospi has resumed its rise since mid 2015. It should be currently in state, which makes great progress to the upside.

Interestingly the rise since 2015 is throughout an environment of constant threat from its northern neighbor. It seems like the market climbs a wall of worry.

Technical Analysis