KOSPI finds buyers at key support level
Korea Composite Stock Price Index (KOSPI) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
KOSPI finished Thursday at 1686.24 edging lower ₩18.52 (-1.09%). Trading ₩36.64 higher after the open, Korea Composite Index was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on February 21st, KOSPI lost -3.87% on the following trading day. 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 Mar 26, 2020):
Thursday's trading range has been ₩56.52 (3.33%), that's slightly below the last trading month's daily average range of ₩73.25. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for KOSPI.
After moving higher in the prior session, the market closed lower but above the previous day's open today, forming a bearish Harami Candle.
After trading down to 1679.23 earlier during the day, the stock index bounced off the key technical support level at 1680.60 (S1). The failure to close below the support might increase that levels importance as support going forward.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Harami Candle" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Korea Composite Index. Out of 39 times, KOSPI closed higher 53.85% 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 69.23% with an average market move of 0.76%.