Breakouts & Big Money: 3 HK SDRs Riding China’s Investment Boom

Executive Summary

Mainland capital is pouring into Hong Kong stocks at record levels this year, and the momentum is picking up fast. With over HK$820 billion already flowing in via Stock Connect and trade tensions easing globally, the Hang Seng is approaching multi-year highs—and breakout opportunities are surfacing.

In this article, I zoom in on three high-conviction HK SDRs: Bank of China, Tencent, and PetroChina. Using my One Good Trend (1GT) Strategy, I break down the latest bullish signals and key levels that could define the next move. If you’re looking to ride this wave with clarity and precision, these are the setups to watch now.

1) Bank of China Ltd (3988.HK)

Bank of China (3988.HK) remains one of the most closely watched state-owned commercial banks in China, with solid fundamentals and wide exposure to global markets. Technically, the stock is showing a promising setup once again, especially after a period of consolidation.

The longer-term trend, the stock continues to ride above both the 100-day (red line) and 200-day (blue line) moving averages, which are both pointing upwards. 

This alignment reinforces a structurally bullish trend that remains intact. Short-term momentum appears to be returning as well. 

The 20-day moving average (green line) has just started to flattened after a recent pullback, and more importantly, the price has rebounded from the 4.40 HKD (S$0.70) support level. 

Just one month ago, we saw a new bullish 1GT (Pro) signal still present, from where prices approached the 4.80 HKD (S$0.77) zone.

This new signal is still actively playing out, and if previous signals are anything to go by, we could be seeing the early stages of another bullish leg higher.

The key support zone to monitor remains at 4.40 HKD (S$0.70), which has held firm multiple times this year and where buyers have continued to defend. 

As long as this level holds, the uptrend remains intact.

On the upside, the immediate resistance to watch is at 4.80 HKD (S$0.77). 

A successful breakout here could open the door to the next target at 5.20 HKD (S$0.83), where sellers could emerge.

So how does one take a position in Bank of China from the HK SDR traded on the SGX?

Well, you can take a position in this SDR, which is named Bank of CN HK SDR 1to1 (HBND), currently priced at approximately S$0.765.

A conservative approach would be to accumulate near the 4.40 HKD (S$0.70) support, with a stop-loss just below to manage downside risk.

An aggressive approach would be to enter on the breakout above 4.80 HKD (S$0.77), with the 5.20 HKD (S$0.83) zone as the next target.

With the long-term trend still intact and the latest 1GT bullish signal now in play, this setup could present a high-probability opportunity if momentum continues to build.

The SDR ratio is 1 SDR to 1 underlying share.

The conversion from HKD to SGD is done by multiplying by the exchange rate (0.16).

2) Tencent Holdings Limited (07.HK)

Tencent Holdings Limited (0700.HK), one of China’s tech titans and a staple in many investors’ watchlists, is starting to show signs of renewed strength after consolidating over the past quarter.

Looking at the bigger picture, the stock continues to respect its long-term uptrend, staying well supported above both the 100-day (red) and 200-day (blue) moving averages. 

These moving averages have also started to slope upward again, an encouraging sign that the trend may be resuming.

More recently, price rebounded strongly off the 480 HKD level (S$7.68), which is near the 100-day moving average and prior demand zones. 

From there, it surged higher and just cleared the 540 HKD (S$8.64) resistance zone last week.

This breakout was accompanied by a fresh 1GT (Pro) bullish signal, suggesting this move could have legs.

As of now, prices are hovering near the support of 540 HKD (S$8.64) and attempting to hold above the breakout zone. 

If it holds, the next upside target lies at the psychological 600 HKD level (S$9.60).

The key support level to monitor remains at 480 HKD (S$7.68), which has held firm multiple times this year. 

So how does one take a position in Tencent Holdings Limited from the HK SDR traded on the SGX?

You can consider trading the Tencent HK SDR 10 to 1 (HTCD), which has an underlying ratio of 10 to 1, currently priced at around S$9.10.

Note that each SDR represents 1/10th of a Tencent share, and the HKD-SGD conversion is applied based on a 0.16 exchange rate.

An approach would be to accumulate near the new higher support zone at 540 HKD (S$8.64) if price pulls back. 

However, do also take caution and manage your downside with an appropriate stop loss order if the key support level at HKD 480 (S$7.68) is broken.

The fresh 1GT bullish signal suggests this breakout could have momentum, especially with Tencent being a top target among value-seeking mainland inflows via the Stock Connect channel.

3) PetroChina (0857.HK)

PetroChina (0857.HK), China’s largest oil and gas producer, has quietly emerged as one of the more stable outperformers in the energy space this year, fueled by steady earnings, high dividend yields, and improving oil price sentiment.

Technically, the chart is looking bullish.

Price has surged above the key resistance at 7.30 HKD (S$2.34), driven by a strong series of higher lows and rising moving averages. 

The 20-day, 100-day, and 200-day moving averages are all trending upward in tandem, a classic signal that the uptrend is strong and intact.

The most recent breakout above 7.30 HKD (S$2.34) was accompanied by a new bullish 1GT signal, suggesting strong upward momentum is still in play.

Currently, price is consolidating below the 8.00 HKD (S$2.56) resistance level. 

If the stock can break and close above this level convincingly, we could see a strong move higher as momentum traders step in.

The nearest support sits at 7.30 HKD (S$2.34), which was the previous breakout level and could now act as a new floor. If that breaks, the next key support lies at 6.60 HKD (S$2.11).

The current trend structure remains bullish, and this recent pause in price action could be the calm before another leg up.

So how does one take a position in PetroChina from the HK SDR traded on the SGX?

One can consider the PetroChina HK SDR 1 to 2 (HPCD), which is currently trading near S$2.47.

Immediate resistance can be seen at 7.30 HKD (S$2.34), and beyond that, the next resistance level is at 8.00 HKD (S$2.56), which could be the next upside target if momentum resumes.

A conservative approach would be to accumulate on dips near the 7.30 HKD (S$2.34) support level, with a stop-loss just below to manage risk in case of breakdown.

An aggressive approach would be to enter on a breakout above 8.00 HKD (S$2.56), where we may see prices enter a new phase.

With the recent 1GT Bullish signal still playing out and both short-term and long-term trends turning positive, PetroChina looks poised for further upside if support levels continue to hold.

For PetroChina HK SDR listed on SGX, the SDR ratio is 1 SDR to 2 underlying shares. 

This means the conversion from HKD to SGD is simply done by multiplying by the exchange rate of 0.16 then multiplying by 2 to get the SGD price.

 About the Author - Joey Choy

Joey is Singapore’s renowned mentor on how to make an income by trading the stock market, an author and one of the most-watched, quoted and followed stock trading trainers in Singapore. Over the years, he has conducted numerous full house seminars, enriching thousands to trade more profitably. 

Joey’s come back story from a S$740k debt has been featured in the Business Times and inspired thousands in Singapore. In less than 3 years, he is highly regarded as one of the Top Tier Remisiers (Stock Brokers) and Traders, bagging numerous yearly awards like Top Trading Representative and Top CFD Achiever every year from 2014 to 2023 in Phillip Securities.

More about Joey here

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