Chart of the day: Korean stocks set for rally
The Korea Composite Index has been especially hard hit as concerns about global growth have fuelled risk aversion across assets in recent weeks. However, while the gauge is currently the weakest of the Asian markets in sentiment terms, the degree of pessimism that Absolute Strategy Research's indicators are pointing to suggests potential contrarian support may emerge as it tests an important Fibonacci support area at around 1,900 points. The trend bias for the index also remains supportive. It appears especially well placed to rally on any macro news flow that helps ease concerns over the global growth outlook.
David McBain is a technical strategist at Absolute Strategy Research