To The Moon

With the STI hitting record highs today, all eyes have been on the "big brothers" of the banking sector. But for those of us watching the laggards, the technical setup on United Overseas Bank (UOB) as of January 6, 2026, is finally flashing a clear "buy" signal. $UOB(U11.SI)$

After months of underperformance due to concerns over asset quality in Greater China, UOB has officially staged a decisive bullish breakout from the descending channel that has capped its price action since mid-2025.

UOB Technical Chart

The Breakout and Momentum

The price action today at $35.91 is significant because it marks a clean exit from a long-term period of distribution. Looking at the Volume, we can see a noticeable spike accompanying this move. In technical analysis, a breakout without volume is often a "fake-out," but this move is backed by strong buying interest, suggesting institutional rotation into the stock as investors hunt for value in an otherwise "expensive" market.

The RSI (Relative Strength Index) is also telling an optimistic story. After languishing in the neutral 40–50 zone for months, it is now hooking sharply upward toward the 65 level. This indicates that momentum is shifting from bearish exhaustion to bullish expansion. Importantly, it isn't "overbought" yet, leaving plenty of "runway" for the price to climb before the trend becomes overextended.

Trend Confirmation: The Moving Averages

UOB is now trading firmly above its 200-day Moving Average (Green line), which has acted as a stubborn ceiling for most of the past year. By reclaiming this level, the long-term trend has officially flipped from neutral-bearish to bullish.

Furthermore, we are on the verge of a "Golden Cross" setup in the coming sessions, as the 20-day (red) and 50-day (blue) moving averages begin to curl upward. If these short-term averages cross above the 200-day MA, it will likely trigger algorithmic buying, further accelerating the move toward the $37.50 resistance zone.

The "Catch-Up" Thesis: Valuation vs. Peers

The primary reason UOB is gaining traction now is the stark valuation gap compared to its peers. While DBS and OCBC are trading at or near all-time highs, UOB remains the undisputed "value play" of the Big Three.

• Price-to-Book (P/B) Ratio:$DBS(D05.SI)$ is currently trading at a premium valuation of approximately 1.8x to 2.0x P/B, reflecting its dominant ROE. $OCBC Bank(O39.SI)$ sits around 1.25x to 1.3x. In contrast, UOB is still trading near 1.2x P/B. This discount provides a much larger margin of safety for new entries.

• Dividend Yield: UOB continues to offer a very attractive dividend yield, forecast at roughly 5.4% for 2026. For income-focused investors, this yield—combined with the potential for capital appreciation—makes UOB the most compelling risk-to-reward setup on the board today.

Summary for the Forum: The "sleeping giant" has woken up. As long as UOB holds above the $35.00 breakout level (which should now act as support), the technical target remains the early 2025 highs of $37.50. This looks like the classic "last man standing" rally—the laggard finally playing catch-up to a red-hot Straits Times Index.

Summary for the Forum: As long as UOB holds above the $35.00 breakout level (the new support), the technical target remains the early 2025 highs of $37.50. This looks like the classic "last man standing" rally—the laggard finally playing catch-up to a red-hot Straits Times Index. [Call]

Kenny Loh is a distinguished MAS Private Wealth Advisor with a specialization in holistic investment planning and estate management. He excels in assisting clients to grow their investment capital and establish passive income streams for retirement. Kenny also facilitates tax-efficient portfolio transfers to beneficiaries, ensuring tax-efficient capital appreciation through risk mitigation approaches and optimized wealth transfer through strategic asset structuring.

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