Bank of China Ltd (HKEX: 3988) bearish downtrend is beginning to see some light. Key technicals are prompting a rebound in prices:
- 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.
- 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.
- 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.
- Volume had a huge spike on Tuesday.
- 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
