KOSPI dominated by bears dragging the market lower throughout the day
Korea Composite Stock Price Index (KOSPI) Technical Analysis Report for Jul 10, 2020 | by Techniquant Editorial Team
KOSPI finished the week -0.1% lower at 2150.25 after losing ₩17.65 (-0.81%) today. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 2166.74, the index confirmed its breakout through the previous session low after trading up to ₩26.45 below it intraday.
Daily Candlestick Chart (KOSPI as at Jul 10, 2020):
Friday's trading range has been ₩31.23 (1.44%), that's slightly below the last trading month's daily average range of ₩35.33. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for KOSPI.
In spite of a strong opening the market closed below the prior day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on May 11th, KOSPI lost -0.68% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying might accelerate should prices move above the nearby swing high at 2181.48 where further buy stops could get activated.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed below last periods low" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Korea Composite Index. Out of 383 times, KOSPI closed higher 56.14% 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 54.57% with an average market move of 0.19%.