Bullish Reversal Signals Strong Upside for China International Capital Corp Ltd (3908)

Date: September 27, 2024
Broker: CGS International

Company Overview

China International Capital Corporation Limited (CICC) operates as an international investment bank. The company provides a variety of financial services, including investment banking, capital markets, securities sales and trading, fixed income, asset management, and private equity. Additionally, it offers individual wealth management and research services. CICC plays a critical role in providing financial services both domestically in China and internationally.

Technical Analysis

The stock price of CICC (HKG: 3908) is currently showing a strong reversal to the upside. This bullish sentiment is driven by the following factors:

• Price Action: CICC has broken out of a larger descending triangle pattern with support from a steady flow of rising volume. The bullish engulfing candle pattern supports the positive momentum.

• Technical Indicators:

  1. The short-term rate of change (ROC) has risen above the zero line, signaling a bullish trend reversal.
  2. The Directional Movement Index (DMI) indicates strengthening bullish momentum.
  3. The mid-term Stochastic Oscillator has confirmed an oversold crossover, supporting the upward momentum.
  4. The long-term Moving Average Convergence Divergence (MACD) histogram is positive, reinforcing the bullish trend.
  5. Volume has risen consecutively for the past 10 trading days, further indicating strong buying interest.

Key Trading Levels

• Entry Price(s): HK$10.62, HK$9.00, HK$8.53
• Support Levels:
  • Support 1: HK$9.35
  • Support 2: HK$8.30
• Stop Loss: HK$7.36
• Resistance Levels:
  • Resistance 1: HK$11.20
  • Resistance 2: HK$13.50
• Target Prices:
  • Target Price 1: HK$12.80
  • Target Price 2: HK$13.90
  • Target Price 3: HK$15.50
  • Target Price 4: HK$16.30

Trading Recommendation

Traders are encouraged to consider buying at the current spot price of HK$10.72 or to accumulate on pullbacks at HK$9.00 or HK$8.53. A stop loss should be set at HK$7.36. Upon reaching the first target price of HK$12.80, it is recommended to shift the stop loss to break even to lock in profits. The long-term target for CICC is projected at HK$16.30.

Analyst Contact Information

• Analyst: CHUA Wei Ren, CMT
• Telephone: (65) 6210 8612
• Email: weiren.chua@cgsi.com

Disclaimer

This report is provided by CGS International for informational purposes only and does not constitute investment advice. It is prepared from data believed to be reliable at the time of publication. However, CGS International does not guarantee the adequacy, accuracy, or completeness of the information provided.