China Merchant Bank (HKEX: 3968) has been on a corrective downtrend since it met our first target price at HK$70.32 based on our report dated 6^th May 2021. Technicals also indicate that China Merchant Bank will have a bullish rebound:   

1. The corrective downward channel can be interpreted as a bullish flag. The corrective double three wave is likely completed after wave (Y) appears to be supported above the HK$55.00 psychological support.
2. After the (Y) wave completion. There is a potential “Sandan” wave whereby the ichimoku wave theory states that a complete cycle consist of 3 “N” waves. Each “N” waves will have a kihon-suchi numbers as a day of change/reversal. Looking at the chart above, the 1^st “N” wave has completed 9 periods and the 2^nd “N” waves 26 periods. The next “N” wave will potentially have a bullish run of 33 day periods.
3. Bullish engulfing candle is well supported above HK$61.25 and has since pierced above the Kumo. Signalling a strong bullish trend ahead.

*Expected timeline of the trade is 15 weeks from the date of report issuance.