To The Moon

After undergoing a period of consolidation and pull-back earlier this year,momentum in UOB shares has started to strengthen again, supported by the stock reclaiming the key $37.00 level, which is now acting as a near-term support zone – according to SGX Academy Trainer Joey Choy.

He believes attention is nowshifting toward the key $39.00 resistance level, which represents the previous high and an important psychological barrier for the stock.

Read on for his explanation, as well as a commentary on how one can use UOB call and/or put warrants to trade his view： （https://joeychoy.beehiiv.com/p/uob-approaches-a-key-decision-point）

Executive Summary

United Overseas Bank Limited ( $UOB(U11.SI)$ ) continues to maintain a constructive long-term trend, with prices holding firmly above the rising 200-day moving average. After undergoing a period of consolidation and pull-back earlier this year, momentum has started to strengthen again, supported by the stock reclaiming the key $37.00 level, which is now acting as a near-term support zone. The recent rebound from the moving averages, together with a fresh 1GT Bullish signal emerging after the breakout above $37.00, suggests that buyers are gradually stepping back into the market as momentum rebuilds within the broader trend structure.

Attention is now shifting toward the key $39.00 resistance level, which represents the previous high and an important psychological barrier for the stock. The current consolidation beneath this level appears constructive, suggesting that momentum may continue building as long as prices hold above the $37.00 support region. A sustained move above $39.00 could potentially signal continuation of the broader uptrend, while broader sentiment in Singapore banks continues to remain supported by resilient earnings expectations, stable interest rate conditions, and ongoing institutional interest within the financial sector.

UOB (TradingView) – 25 May 26

United Overseas Bank Limited (UOB) is one of Singapore’s leading banks, with a strong regional presence across Southeast Asia through its core businesses in consumer banking, commercial banking, wealth management, and treasury services. The bank continues to benefit from resilient loan growth, expanding regional operations, and steady fee income generation, while its strong capital position and consistent dividend profile have continued to attract longer-term investors seeking stability within the financial sector.

From a long-term perspective, UOB continues to trade within a constructive uptrend, with prices holding firmly above the rising 200-day moving average. 

The broader structure remains healthy, suggesting that longer-term buying momentum continues to support the trend. 

Momentum has started to strengthen again after a period of consolidation and pull-back earlier this year. 

Price has recently reclaimed the $37.00 level, which is now acting as a near-term support zone, while the 20-day moving average has begun turning upwards once more. 

The recent rebound from the moving averages suggests that buyers are gradually stepping back into the market as the stock attempts to retest its previous highs.

More importantly, a fresh 1GT Bullish signal has recently emerged after breaking above the 37.00 level, highlighting an area where buyers re-entered as price stabilised above support. 

The stock is now approaching the key $39.00 resistance level, which represents the previous high and an important psychological barrier. 

The current price structure suggests that momentum is gradually rebuilding beneath this level, and as long as prices continue holding above the $37.00 support region, the setup may favour further upside.

A sustained move above the $39.00 resistance could potentially open the path toward a continuation of the broader uptrend.

If prices are not able to stay above the $37.00, the next key support level will be at $35.00, which was the recent low where it rebounded from.

So, how does one take a position in UOB with the potential $39 resistance level in mind, using lower initial capital outlay?

Investors who wish to be exposed to potential upside moves in UOB shares from its current share price level toward the $39 resistance level and beyond, can consider using a UOB call warrant to magnify the share price return using lesser capital and without the risk of margin calls.

Alternatively, if UOB does not manage to break above the $39 resistance level, investors may consider hedging or positioning for a potential short-term pullback using UOB put warrants, which move inversely to the bank’s share price.

1) Using UOB call warrants to trade its current share price level toward $39 and/or beyond

To know how UOB call warrants will perform should UOB shares soldier toward the $39 resistance level, investors can use the Warrant Selector tool (https://warrants.com.sg/tools/selector)

Given that one is bullish on UOB shares, click on the call button after selecting “UOB” from the underlying drop down:

Type in the intended exit level/resistance level of $39 in the “Target Price” field and click on the ^ button on the “weeks” field:

The featured warrants in the table above refer to all warrants quoted on tight spreads (i.e. less than 3 warrant ticks between the bid and offer prices) Note: The estimated returns are only valid on the date of usage, and may change from day to day

Should UOB take 4 weeks to gain 3.3% from its current price of $37.74 (as of 3PM on 22 May) to the resistance level of $39, the first call warrant $UOB MB eCW260930(Y2FW.SI)$ (https://warrants.com.sg/tools/livematrix/Y2FW) will gain 5.8 times more I.e +19.2% from $0.073 to $0.087. The second call warrant $UOB MB eCW260730(HIQW.SI)$ (https://warrants.com.sg/tools/livematrix/HIQW) will gain 11.9% from $0.042 to $0.047.

Keep increasing the number of weeks and one would find that the percentage gains on both call warrants will erode. This is due to the effect of time decay – the costs of holding a warrant, where the longer one holds onto the warrant, the higher the holding costs.

Should one prefer the first warrant of Y2FW, the investor should note that the maximum holding period for this warrant is around 9 weeks as the warrant will be in the red even if UOB shares traded to $39, due to time decay eroding all of the warrants’ geared returns.

The featured warrants in the table above refer to all warrants quoted on tight spreads (i.e. less than 3 warrant ticks between the bid and offer prices) Note: The estimated returns are only valid on the date of usage, and may change from day to day

Thus, should UOB fail to reach $39 in 9 weeks, an investor should cut losses and exit from the warrant anyway.

If an investor is aiming for UOB shares to break the $39 resistance level and move higher, the holding period for the warrant would be longer. For example, should UOB head toward $40, Y2FW will now return approximately +27.4% in 10 weeks, and the maximum holding period is extended to around 16 weeks.

The featured warrants in the table above refer to all warrants quoted on tight spreads (i.e. less than 3 warrant ticks between the bid and offer prices) Note: The estimated returns are only valid on the date of usage, and may change from day to day

What this means is that the more the underlying shares move in an investor’s favour, the more gearing a warrant will enjoy to offset the time decay, allowing investor’s a longer holding period, assuming all other pricing factors remain constant

2) But what if UOB fails to break the resistance level of $39?

If so, one can consider using a UOB put warrant when UOB trades to $39 and fails to penetrate above. To select a suitable UOB put warrant, one can repeat the above steps of using the Warrant Selector and choose the “put” instead of a “call”. Assuming one decides on the trending UOB put warrant $UOB MB ePW260930(EPGW.SI)$ (https://warrants.com.sg/tools/livematrix/EPGW), the Exposure Simulator (https://warrants.com.sg/tools/exposuresimulator) is a tool that can help investors estimate their warrant investment and returns versus a shareholding position in UOB shares.

Exposure Simulator: type in number of UOB shares you would buy to see the equivalent amount of warrant investment in chosen put warrant to hedge the same level of stock exposure

Using the example of an investor holding onto 3,000 UOB shares (worth SGD 113,220) and keen to hedge against a pullback in UOB shares from the $39 resistance level, an investor can invest approximately $13,641 (before brokerage costs) to buy ~341,000 units of UOB put warrant EPWG to hedge the $113,220 worth of exposure.

The reason for the much lower capital required is due to the warrant’s effective gearing of 8.3 times, meaning, the warrant will move approximately 8.3 times more than UOB shares, and costs $0.040 versus UOB’s share price of $37.74 on 22 May.

The target exit level for the put will be the price level that the investor believes UOB will find support at. Using the target support level of $35  for example, the put warrant will make absolute price returns of $8,526 that will fully cover the UOB investor’s shareholding loss of $8,220 holding onto 3,000 UOB shares, should UOB shares fall by 7.3% to $35 in 18 days.

Holding onto the put warrant for longer than 18 days will result in a lower absolute price return that may not fully cover the shareholder’s share price loss. For example, if UOB shares were to fall by 7.3% in 50 days, the absolute $4,092 return in the UOB put warrant will fail to cover the $8,220 share price loss, although the 30% return of the warrant remains magnified to the UOB’s share price loss of –7.3%.

Given the availability of call and put warrants, investors can participate either in the short-term upside or downside in UOB shares depending on whether the share can break the $39 resistance level and where the investor thinks the UOB share price is heading. Both the Warrant Selector and Exposure Simulator tools mentioned can be applied to either call or put warrants to help warrant investors estimate the warrant performance, maximum holding period and estimated investment amount in the warrants.

The sharing on how one can take a position using warrants has been contributed by Macquarie Warrants Singapore who is the issuer of these warrants listed on SGX.

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.