KOREA KOSPI INDEX

Emerging market equities are showing weakness. Most of them are off of their 2011 high levels, below their long-term moving averages and in a downtrend. One example is Korea’s KOSPI Index. Weak and choppy rebound towards the 200-day moving average has formed a rising wedge (usually considered bearish). Meanwhile RSI hasn’t moved above the 50 levels (another bearish sign). When combined together; – below 200 day moving average – rising wedge pattern and – RSI finding resistance at 50 levels, it is not a bullish outlook for Korea. If the index breaks below 1,750 level it will confirm the rising wedge and we are likely to see lower prices towards 1,500 levels.However a sustained break above 2,000 levels should be positive for the intermediate term trend.