UOB Ltd – Daily timeframe
*Entry Price: 27.21 Stop loss: 25.35 Take profit: 29.95
*UOB Ltd will be added to the Phillip 20 Portfolio once the trade is triggered
Current Sentiment: Bullish
Support 1: 26.00 Resistance 1: 28.60
Support 2: 25.55 Resistance 2: 29.95
Price has been stuck in a major correction since hitting a high of 30.37 in late April. Nonetheless, the long-term uptrend remains intact as the 25.81 support area seemed to be holding up for now.
Despite price breaking below the 200 day moving average since 14/07/18, the 26.00 psychological round number appears to be keeping a floor on price. The Bullish Engulfing Bar rejection off the 26.00 psychological floor was the first sign of strength that price might be forming a near-term base off the 26.00 psychological round number. Moreover, with the subsequent bullish break above the 200-day moving average and 26.98 immediate range high on 04/07/18, there could be a reversal back into the long-term uptrend.
Additionally, with the sharp selloff since late April, the Relative Strength Index (RSI) has also recently slipped into the oversold condition since 13/07/18. However, the recent bullish breakout has lifted the RSI back above the oversold condition suggests a mean reversion to the upside is taking place.
Thus with the current bullish breakout and oversold RSI mean reversion, expect price to rebound higher next to test the 28.06 resistance area followed by 28.82.
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