Broker: CGS International
Date of Report: June 26, 2025
Bank of China Poised for Bullish Breakout: In-Depth Technical & Market Analysis for 2025
Market Overview: Navigating Unprecedented Headwinds in 2025
As global equity markets power through a turbulent 2025, investors are grappling with an extraordinary confluence of risks: a new US presidential administration, restructuring of global alliances, sweeping tariffs, and heightened geopolitical tensions in the Middle East. Yet, the resilience of the US stock market is undeniable, with the S&P 500 hovering near record highs despite these challenges.
However, valuation concerns are mounting. The S&P 500 trades at a striking 22 times forward earnings, which is 35% above its long-term average. All 20 of Bank of America’s tracked valuation metrics signal that the index is expensive. With the US President’s July 9 deadline for major trade agreements looming and a new earnings season on the horizon, investors face pivotal weeks ahead. Bloomberg Intelligence models suggest that, given current Treasury yields, earnings, and equity risk premiums, the S&P 500’s fair trailing P/E should be around 17.7—well below the current 23.7. Unless earnings jump by 30% over the next year, a price correction or valuation reset may be inevitable.
Stoneweg Europe Stapled Trust (SERT): Expanding into Data Centres
SERT has announced a strategic €50 million investment into a European data centre fund, further diversifying its exposure in this high-growth sector. This move is anticipated to enhance SERT’s net asset value (NAV) and drive valuation upside.
- Investment: €50 million into IDC fund
- Expected Impact: Strategic exposure to robust data centre growth, with positive implications for NAV and future returns
- Recommendation: Reiterate Add, target price unchanged at €1.93
Bank of China Ltd (3988): Technical Buy Recommendation
CGS International signals a technical buy on Bank of China Ltd (HKG: 3988), highlighting the stock’s strong technical patterns and bullish momentum. After being stopped out at HK\$4.08 in early April, Bank of China rebounded sharply, showcasing resilience and renewed investor interest.
| Entry Price(s) |
Support 1 |
Support 2 |
Stop Loss |
Resistance 1 |
Resistance 2 |
Target Price 1 |
Target Price 2 |
Target Price 3 |
Target Price 4 |
| 4.76, 4.55, 4.25 |
4.43 |
4.24 |
4.14 |
4.74 |
6.20 |
5.74 |
6.24 |
7.80 |
9.20 |
Company Overview:
Bank of China Limited offers a comprehensive suite of banking services, including deposits, loans, foreign currency transactions, fund settlement, and related services to individuals, enterprises, and institutions.
Technical Snapshot: Why Bank of China Stands Out
- Ascending Triangle Formation: The stock has formed a large ascending triangle, with repeated tests above HK\$4.74 weakening resistance and setting the stage for a breakout.
- Bullish Pressure: Recent closes above previous bearish gaps indicate sustained buying interest.
- Ichimoku Indicator: A strong bullish signal reinforces the positive technical outlook.
- MACD: The MACD histogram is approaching neutral, while both MACD and signal lines remain elevated above zero, confirming momentum.
- Stochastic Oscillator: Rising steadily, supporting the bullish technical setup.
- Rate of Change (ROC): The 23-period ROC is positive and strengthening.
- Directional Movement Index: Sustained bullish strength is evident.
- Volume: Strong expansion in trading volume supports price action.
- Alternative Exposure: Investors may consider Bank of China’s Singapore SDR (SGX: HBND) at S\$0.775 for currency risk mitigation.
Analyst Contact
Investment Ratings and Framework
| Stock Rating |
Definition |
| Add |
Total return expected to exceed 10% over the next 12 months. |
| Hold |
Total return expected between 0% and 10% over the next 12 months. |
| Reduce |
Total return expected to fall below 0% over the next 12 months. |
Sector and Country Ratings:
– Overweight: Positive recommendation relative to benchmark
– Neutral: Neutral recommendation relative to benchmark
– Underweight: Negative recommendation relative to benchmark
CGS International Coverage and Distribution
| Rating |
% of Coverage |
% Investment Banking Clients |
| Add |
71.0% |
1.3% |
| Hold |
20.9% |
0.7% |
| Reduce |
8.2% |
0.4% |
Companies Under Coverage: 551 (as of March 31, 2025)
Brokerage and Regulatory Disclosures
CGS International operates across multiple jurisdictions, including Hong Kong, Indonesia, Malaysia, Singapore, South Korea, and Thailand, adhering to local regulatory standards. The report covers legal disclaimers, confidentiality considerations, and eligibility criteria for investors in different regions.
Conclusion: Key Takeaways for Investors
- Global markets remain buoyant despite significant macroeconomic risks and elevated valuations, especially in the US.
- Stoneweg Europe Stapled Trust’s strategic move into European data centres positions it for NAV growth and enhanced valuation.
- Bank of China Ltd presents a compelling technical buy opportunity, with multiple bullish indicators and defined price targets, supported by robust trading volume and technical momentum.
- Investors should conduct their own due diligence, considering their individual risk profiles and investment objectives.
For further information or investment actions, clients should contact their CGS International representative or refer to the detailed technical and sectoral breakdowns provided above.
