Technical Pulse: Industrial & Commercial Bank of China Ltd February 19, 2021 556

 

ICBC Ltd (HKEX: 1398) bearish downtrend has been broken after prices invalidate the secondary downtrend line in November 2020. Despite the upside has been making slow progress, recent technical indicate that ICBC will be heading for a strong upside:

 

  1. Despite the Ichimoku showing flat/range signals. Prices are still trending above the Tenkan, Kijun-sen and the Kumo.
  2. Price action indicate that the resistance zone at HKD$5.23-HKD$5.32 has been tested multiple times, thus weakening the zone.
  3. The cup and handle formation together with the larger pennant formation are continuation of a bullish signal.
  4. The inside bar with a long legged doji after a bullish engulfing is considered as a consolidation before continuing in the direction of the immediate impulse move. In this case, the sub bullish impulse move.

 

*Timeline of the trade is 4 weeks from the date issued.

*Should prices fails to rally, the next potential support will be at HKD$4.40-HKD$4.49 region.

 

CHART LEGENDS

 

Ichimoku Kinko Hyo

Red dotted line = 9 Periods Tenkan-Sen

Blue dotted line = 26 periods Kijun-Sen

Green Line B= 52 periods Senkou Span B

Pink Line A = 26 periods Senkou Span A

Black line = 26 periods Chikou Span. Lagging line

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