KOSPI runs into sellers around 2281.41 for the third day in a row
Korea Composite Stock Price Index (KOSPI) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
KOSPI ended the month 6.69% higher at 2249.37 after losing ₩17.64 (-0.78%) today. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 2263.81, the stock index confirmed its breakout through the previous session low after trading up to ₩15.32 below it intraday.
Daily Candlestick Chart (KOSPI as at Jul 31, 2020):
Friday's trading range has been ₩32.92 (1.44%), that's far above the last trading month's daily average range of ₩25.23. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for KOSPI.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Even with a strong opening Korea Composite Index closed below the prior day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on July 10th, KOSPI actually gained 1.67% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
The index ran into sellers again today around 2281.41 for the third trading day in a row after having found sellers at 2281.33 in the previous session and at 2276.79 two days ago.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Down Close Near Low of Period" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Korea Composite Index. Out of 419 times, KOSPI closed higher 58.23% of the time on the next trading day after the market condition occurred.