RSI 89. Vol Spiking. And Still Cheap?
The Korean squeeze
Credit where credit is due: GS upgraded Korea to overweight in June 2025 following the national elections, and the call has delivered. Since then, the KOSPI has rallied more than 100% in USD terms, materially outperforming MSCI World, Asia ex-Japan, and the S&P 500.
GS still ranks Korea at the top of their global and regional pecking order and have raised the KOSPI target to 6,400. Investors are now rushing to reduce underweights amid rising earnings, memory upside, attractive valuations, and ongoing reform momentum.
89!
EWY weekly RSI at 89! Getting a bit extreme...even if you are bullish.
Source: LSEG Workspace
Upside panic
KOSPI VIX has exploded to the upside as people are getting "desperate" to buy the KOSPI. Spot up, volatility up playing out in full motion.
Source: LSEG Workspace
Who's buying
Not many international punters...
Source: GS
Allocation
Plenty of money to chase the South Korean wonder.
Source: GS
Bad choice
Korean retail investors have continued to favor US equities over domestic stocks, despite the strong rally in Korean markets.
Source: Soc Gen
Valuation
KOSPI 12m forward P/E multiple has remained below its historical average.
