KOSPI closes above its opening price after recovering from early selling pressure
Korea Composite Stock Price Index (KOSPI) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
KOSPI ended the week 1.43% higher at 2243.59 after gaining ₩10.63 (0.48%) today. Trading up to ₩10.81 lower after the open, the stock index managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (KOSPI as at Feb 14, 2020):
Friday's trading range has been ₩29.60 (1.33%), that's slightly below the last trading month's daily average range of ₩30.64. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for KOSPI. Prices continued to consolidate within a tight trading range between 2214.77 and 2255.49 where it has been caught now for the last three trading days.
Buyers managed to take out the key technical resistance level at 2235.13 (now S1), which is likely to act as support going forward. After having been unable to move above 2255.49 in the prior session, the index ran into sellers again around the same price level today, missing to move higher than 2251.50. The last time this happened on February 7th, KOSPI lost -0.49% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might speed up should prices move above the nearby swing high at 2255.49 where further buy stops could get activated. With prices trading close to this year's high at 2277.23, upside momentum might accelerate should Korea Composite Index be able to break out to new highs for the year.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(2) above 80" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Korea Composite Index. Out of 289 times, KOSPI closed higher 51.56% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 55.36% with an average market move of 0.11%.