Chart of the day: Korean stocks powering ahead
The Korea Composite Index has been soaring, as forecast earlier this year. With the gauge now entering its eighth consecutive monthly rally, perhaps a little caution might be warranted as we approach the psychological 2,500-point level, taking into account that it is already very overbought. Over the medium and longer term, we remain very positive towards this index, which contains many family-owned chaebol whose names are familiar, such as Daewoo, Hyundai, Posco and Samsung. Interestingly, though momentum is strongly bullish, volume has not been nearly as high as one might expect, hinting that many have yet to join in on this move. Measured targets for the index are 2,600 points over the medium term and 2,950 in the long term.
Nicole Elliott is a technical analyst