China Construction Bank (939.HK) A Sharp Reversal Signal Appears

China Construction Bank (939), a major Chinese bank, reported that 3Q net income fell 4.1% on year to 68.21 billion yuan while operating income increased 5.3% to 176.03 billion yuan.

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China Construction Bank (939), a major Chinese bank, reported that 3Q net income fell 4.1% on year to 68.21 billion yuan while operating income increased 5.3% to 176.03 billion yuan.

In fact, the stock posted a sharp rebound from HK$4.93 to HK$5.86 during October. Currently, the stock bounces around 10% from October low, while HSI was only able to rebound around 4%. It would suggest that the stock starts to have a reversal signal to be an outperforming stock.

Technically, the stock broke above a declining wedge, indicating a bullish reversal signal. In fact, the 20-day moving average is turning up, while the 50-day moving average attempts to support the stock prices. In addition, the relative strength index also broke above the declining trend line drawn from July.

Bullish readers could set the support level at HK$5.30, while the resistance levels would be located at HK$5.86 and HK$6.11.


Source: GAIN Capital, TradingView

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