Chart Advisor: KOSPI Index: Approaching Resistance Amid Strong Uptrend

By Manuel Tellechea, CMT

1/ KOSPI Index

2/ NASDAQ on the Move

3/ IBEX leads Europe

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KOSPI Index:  Approaching Resistance Amid Strong Uptrend 

The KOSPI index has shown a significant upward trend since its 2020 lows, reaching 3,089.65 as of July 1, 2025—up 1.12% (+33.71 points) in the latest session. However, the index is nearing a key resistance level at 3,100, marked by the red dotted line.

The index previously underwent 61.80% and 50.00% retracements from earlier peaks, but the uptrend resumed in 2024 within a rising channel (purple line), suggesting continued strength. The breakout above the 3,000 level in 2025 signals bullish m

The KOSPI’s strength aligns with South Korea’s accommodative monetary policy and the global weakness in the U.S. dollar (USD at 97.21), which supports South Korean exports—particularly in the technology sector.

The 5-week RRG chart ending July 1, 2025, shows the relative rotation of various global indices based on JdK RS-Ratio and RS-Momentum. The KOSPI ($KOSPI) is positioned in the “Leading” quadrant with an RS-Ratio around 104 and positive RS-Momentum, indicating it is outperforming other indices such as the Dow Jones ($DJW), currently at 689.41.

The KOSPI’s transition from the “Improving” quadrant to “Leading” reflects growing momentum, supported by its rising RS-Momentum, making it a key indicator for investors seeking bullish opportunities in emerging markets.

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NASDAQ on the Move

The Nasdaq hit new highs, propelled by the “magnificent seven” tech giants reaching a combined $10 trillion market cap, dominating market conversations.

Key Levels:

• Resistance: immediate resistance is at 20,418.31—the recent high—where selling pressure has emerged after the breakout. The next resistance is around 25,600, representing a 26.71% projection above the current level based on the pattern.
• Support: immediate support is around 18,700, with a stronger support around 15,000, near the bottom’s base.

Macroeconomic Context

• Monetary Policy: The Federal Reserve’s rate cuts (100 basis points in 2025) have boosted growth stocks, particularly tech companies that dominate the Nasdaq. The normalization of the yield curve (UST10Y – UST2Y at 0.54%) also supports this rally.
• Tech Sector: The “magnificent seven” (Apple, Microsoft, etc.) with a combined market cap of $10 trillion have been the primary drivers, highlighting the Nasdaq’s strength.
• Geopolitical Factors: Trade tensions (50% tariffs on steel) and the Iran-Israel truce have influenced capital rotation toward risk assets like the Nasdaq.
• ECB Decision: The European Central Bank’s meeting this week (Thursday) could impact the dollar and, consequently, tech stocks.

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IBEX leads Europe

Closing near 14,000 points, the Ibex 35 gained attention with Indra leading gains and banks showing resilience, reflecting a rebound from recent volatility influenced by trade policies.

The index has been bouncing within a wide range since the 2000s, with a failed breakout in 2007 where it was unable to move beyond the 15,000 level. Recently, the index has broken through this resistance once again, drawing attention as investors watch to see whether it can sustain the move and reach higher levels this time.

Macroeconomic Context

• Monetary Policy: The European Central Bank’s (ECB) anticipated decision this week (Thursday) has kept the IBEX in focus, with rate expectations influencing market sentiment.
• Economic Recovery: Spain’s recovery from the 2020 downturn, driven by tourism and banking sectors (e.g., Banco Santander, BBVA), has bolstered the IBEX, though trade tensions (50% tariffs on steel) pose risks.
• Geopolitical Factors: The Iran-Israel truce and ongoing trade disputes have shifted capital flows, with the IBEX benefiting from a relatively stable European outlook compared to other regions.

Relevance

• Why It’s Relevant: The IBEX 35 has been a key focus today due to the level breakout level and the minor pullback after a strong upward trend. This makes it a critical chart for investors tracking European market resilience, especially ahead of the ECB decision. Its sensitivity to banking stocks and export-related sectors highlights its role as a barometer for Spain’s economic health in the current global context.

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Originally posted 2nd July 2025