UOB could see more downside pressure in the days ahead with the formation of a bearish dark cloud cover pattern at the key $15.60 resistance level. The failure to convincingly break above this level for a 2nd time in one month also seems to suggest tough resistance at this level.
With both the RSI and Force Index showing bearish divergences to the price action in the last month and the MACD breaking under its 3-month uptrend line recently, these seem to echo our views that the uptrend momentum is waning and a near term correction is likely.
We expect the stock to find initial support at $14.00 (3-month uptrend line and resistance-turned support level), breaking which, the next support is likely at $12.32 (resistance-turned-support level)
Immediate resistance is pegged at $15.60 (1-year downtrend line and support-turned-resistance level), ahead of $18.00 (key support-turned-resistance level).
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