Bank of China Ltd (HKEX: 3988) bearish downtrend is beginning to see some light.  Key technicals are prompting a rebound in prices:

1. The larger inverted head and shoulder signal a potential bullish upside should the resistance zone at HKD$2.83-HKD$2.87 be broken strongly.
2. The head portion, can be also classified as a cup and handle formation since the right shoulder is in the form of a symmetrical triangle. To add on, there is strong bullish break to the upside of the symmetrical triangle.
3. The target price 2 level, which is 200.0% extension level of the symmetrical triangle confluence with the major resistance level. Hence, it is an attractive price target.
4. Volume had a huge spike on Tuesday.
5. Prices is trending above the 50 and 200-day moving average.

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

CHART LEGENDS

Moving Average

Red dotted line = 200 Periods Moving Average

Blue dotted line = 50 periods Moving Average