One quick look at the chart over the last year tells you just how strong South Korea remains as a choice to Asian exposure.
KOSPI
The Kospi in South Korea is an index that a lot of people probably mistakenly ignore but one quick look at the chart over the last year or so tells you that you have been missing out. We recently formed an ascending triangle after a sharp pullback to the 50-day EMA, and it looks like we are going to go higher. This is a market that might be noisy, but with that being said, the upside is still the way we will go from what I see.
The resistance currently is at the 6180 level with the support at 5640 for short-term traders. It is in the process of a rebound after a technical flash crash in early March where the index shed a rapid roughly 20% in days due to the escalating Iran conflict and oil crossing the $100-barrel psychological threshold.
Semiconductor Demand Drives Recovery
As a major energy importer, South Korea margins are tethered to crude prices, but today's rally was driven by the exceptional semiconductor demand and a perceived de-escalation in some Middle Eastern tensions.
Despite the chaos, Goldman Sachs and others maintained a yearend target of 7000 citing incredibly low valuations for the index overall, which is currently at 8.80 times forward PE relative to the 120% projected earnings growth for 2026. This is a market that should be a strong choice for traders going forward.
The market was up 5.15% during the session. The question now is that we have seen the Iranians have their fuel refinery infrastructure attacked and threatened to attack other countries. So, will we see a spike in crude oil that brings the market back down? Ultimately though that should only end up offering a buying opportunity as Kospi remains one of the better performers.