Thought we broke the downtrend pattern last Thursday!!
But it hit a low on Friday, forming a descending triangle pattern as shown in the picture.
It set the low at 6500 and gradually lowered the high while keeping the low, eventually breaking through.
The probability is quite high, but the current market sentiment isn't good. It seems that Hyundai Motor's earnings shock today led to a slump in the defense industry sector.
Hyundai Motor's earnings shock caused a flood of ETF sell-offs, ultimately leading to the overall sector decline. Additionally, Doosan Fuel Cell, a green energy stock, also experienced an earnings shock-level drop, resulting in a widespread decline in the related sector.
If there hadn't been an earnings shock, we might have easily broken through the 6818 level and reversed some of the convergence pattern today.
The current low is 6429, with the first resistance zone at 6818. Ultimately, breaking through the previous high of 7166 would shatter this trend.
Breaking through 6818 alone would simply establish a sideways base. Breaking through 7166 would be the trigger to change the trend upward.
If 6429 breaks, it will likely head down to fill the gap, with the next support level at 5859.
This would essentially mean KOSPI is out for the season. A complete trend reversal here would make it very difficult to find upside momentum by the end of the year. Foreign investors are likely to sell more, and institutions may just watch the selling momentum continue.
Today, foreigners sold about 2.5 trillion won worth of stocks and around -500 billion won worth of futures.
Foreigners selling -500 billion won in futures is a rather ambiguous amount, especially considering they bought 1.5 trillion won on Friday.
It's unclear whether this was a bet against the market or simply a sell-off after buying heavily for five consecutive days.
Looking at it positively, the foreign selling today could be attributed to large sales from Hong Kong, possibly related to CXMT listing or ETF rebalancing in the semiconductor sector.
This week sees a number of major companies reporting earnings.
SK Hynix on Wednesday, Samsung Electronics, Berkshire Hathaway, Microsoft, Lam Research, Qualcomm on Thursday, and Apple and Amazon on Friday.
On top of that, the US interest rate announcement is scheduled for early Thursday morning.
This week practically decides the fate of KOSPI. Unfortunately, it's stuck in a descending triangle pattern.
Breaking through will require exceptional earnings reports or guidance that exceeds expectations...
If our market doesn't perform well, we have to rely on the US market. Micron needs to close above its 20-day moving average of $990.43, and SOX needs to rise by more than 6% from its current level and break through its 20-day moving average for foreign buying pressure to increase in KOSPI.
This is arguably the most crucial week of the year for KOSPI. Everyone, please adjust your portfolio weights and strategies carefully and aim for good results.
