Emerging markets are inches away from a important event — a breakout. InvestingHaven’s research team has written repetitively about the bullish formation in emerging stocks. It has identified 3 key markets as the most bullish ones: India, South Korea and Taiwan (5 Emerging Markets To Buy In 2017 And 2018).
Now it seems that India and South Korea are the clear outperformers. The stock market in South Korea is very bullish because it broke out in a big way.
Nasdaq.com is clearly not supporting our bullish viewpoint. A recent article suggests it's not bullish South Korean stocks going forward.
The South Korea stock market has finished higher, now, in five straight sessions, advancing almost 70 points or 3.5 percent along the way. Now at a fresh six-year high, the KOSPI rests just beneath the 2,210-point plateau although the market may run out of steam.
The global forecast for the Asian markets is slightly soft, with many of the regional bourses oversold and investors looking for a reason to lock in gains. The European and U.S. markets were slightly lower and the Asian markets figure to follow suit.
Also, CNBC is not very bullish on South Korean stocks, as it recently wrote that “the actual Korean market is really being driven by Samsung (KS:005930) today so I wouldn’t read too much into that in terms of the general sentiment,” based on comments from Crestone Wealth Management CIO David Sokulsky.
The chart conveys a different message. South Korea went through an extremely long consolidation period of 7 years. That is really unusual. The longer the consolidation, the stronger the trend that follows. South Korea broke out in April 2017 and is now confirming its breakout.
The point is clear: South Korea's stock market is bullish and points to much higher prices in 2017 and 2018. The easiest way to play this market is through the EWY ETF.
